Live Data Coverage: July US Nonfarm Payrolls w/ Christopher Vecchio, CFA
US NFP Preview:
- Consensus forecasts are looking for payrolls to come in at +870K, effectively holding the same pace as last month’s +850K reading.
- Taper talk has increased in recent weeks, and a strong July US jobs report could add fuel to that fire.
- Will another strong US jobs report help the US Dollar shake off its summer doldrums? We’ll discuss these questions and more in context of the July US nonfarm payrolls report starting at 8:15 EDT/12:15 GMT. You can join live by watching the stream at the top of this note.
Focus Returns to US Labor Market
The main issue for the US Dollar when it comes to the July US Nonfarm Payrolls report is whether or not the US labor market held onto its momentum after the June report. After all, the prior month’s reading came in at +870K against an expectation for +700K jobs added.
Market participants are expecting that July reading will show stability, given that jobless claims have started to edge higher and a wave of delta variant infections in parts of the country are provoking concerns about potential new restrictions on activity – both economic and social. Consensus forecasts are looking for a reading of +850K, which should help the unemployment rate (U3) drop from 5.9% to 5.7%. Meanwhile, the US labor force participation rate is still a meager 61.6%.
The July ADP employment change report, coming in at +330K, will likely bias expectations lower heading into the official release on Friday morning.
Atlanta Fed Jobs Growth Calculator (August 2021) (Chart 1)
Even if there are good jobs data, there is still a long ways to go before the US reaches ‘full employment’ as experienced pre-pandemic. According to the Atlanta Fed Jobs Growth Calculator, the US economy needs +751K jobs growth per month over the next 12-months in order to return to the pre-pandemic US labor market of a 3.5% unemployment rate (U3) with a 63.4% labor force participation rate.
We’ll discuss these questions and more in context of the July US nonfarm payrolls report starting at 8:15 EDT/12:15 GMT. You can join live by watching the stream at the top of this note.
--- Written by Christopher Vecchio, CFA, Senior Currency Strategist
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