US Nonfarm Payrolls Prep
On Thursday, the 3rd of July at 08:30 ET, the BLS is set to release the latest Employment Situation report for the month of June.
The data is normally released on a Friday, but the schedule has been pushed back in observance of the July 4th holiday.
Here are some views on what to expect.
Overview
Note: Forecasts are subject to change.
Nonfarm Payrolls – Forecast: 106k | Prior: 139 | Range: 160k / 70k
Unemployment Rate – Forecast: 4.3% | Prior: 4.2% | Range: 4.4% / 4.2%
Average Earnings YoY – Forecast: 3.8% | Prior: 3.9% | Range: 4% / 3.7%
General Expectations
US Stocks
Modest job growth—around the 139k–150k range—should maintain investor confidence, particularly in consumer-driven and cyclical sectors. A surprise drop in payrolls might weigh on equities, while an unexpected surge could boost sentiment.
US Dollar
Steady hiring and stable wages are likely to support the US dollar, as they maintain a view of economic resilience. However, if payrolls disappoint, the dollar could soften as market bets on Fed cuts intensify.
US Government Bonds
Bond yields may hold steady or rise slightly on solid job growth, but could fall if the report shows labor-market cooling. Persistent upward wage pressure would limit significant yield declines.
Federal Reserve Policy
A labor market showing signs of moderation—but still robust—may reinforce the Fed’s data-driven stance, allowing for retained pause on rate cuts. Soft payrolls or weakening participation could nudge markets toward anticipation of policy easing later in the year.
Commentary
Wells Fargo
The labor market continues to cool. While May payrolls slightly beat expectations, substantial downward revisions to March and April revealed weaker overall job growth. So far in 2025, nonfarm payrolls have averaged just 124K per month—significantly slower than the 180K average during the same period last year. The trend is expected to persist, with June payrolls forecast to rise by only 115K. Several indicators suggest hiring demand remains soft, including declining job postings, lower small business hiring plans, and a drop in the labor differential to its weakest level since 2021. Though employers are hesitant to cut existing staff, a slight rise in initial jobless claims signals a modest increase in layoffs.
The weakening hiring environment is making it harder for unemployed individuals to find new work. Continuing jobless claims have climbed to their highest levels since 2021, implying further upward pressure on the unemployment rate. With May’s jobless rate at 4.24% unrounded, expectations are for a slight rise to 4.3% in June—though a rebound in volatile household employment data could keep it steady at 4.2%. As labor market slack gradually increases, wage growth is expected to cool, with average hourly earnings projected to rise by 0.3% in June, consistent with its recent trend.
Unicredit
US labor market data for June is expected to show continued, gradual cooling. Nonfarm payrolls likely rose by around 120,000—below the recent three-month average of 135,000—while the unemployment rate is projected to edge up to 4.3%, from 4.2% in May. Average hourly earnings likely increased 0.3% month-over-month and 3.9% year-over-year. Leading indicators suggest hiring is softening amid economic uncertainty, though layoffs remain low. Initial jobless claims in the June payroll reference week rose slightly to 245,000, while continuing claims have trended higher, suggesting slower hiring.
Separately, job openings reported in the JOLTS survey are expected to have declined to 7.3 million in May from 7.39 million in April, reinforcing signs of easing demand for labor. Despite these trends, the labor market remains resilient overall, allowing the Federal Reserve to take a cautious, wait-and-see approach on rate cuts. As long as employment conditions remain relatively stable, the Fed is unlikely to feel immediate pressure to begin easing monetary policy.
Morgan Stanley
Headline payrolls are projected to rise by 140,000 in June, driven in part by fewer federal layoffs compared to May. However, private sector hiring is expected to slow further, with an estimated gain of 120,000—below the three-month average of 133,000. This moderation in job growth is seen as insufficient to lift the unemployment rate, which is expected to hold steady at 4.2%.
Average hourly earnings are forecast to increase by 0.3% month-over-month, maintaining a 3.9% year-over-year gain. These wage trends remain consistent with recent patterns, suggesting stable but gradually cooling labor market conditions.
Previous Release
On June 6th at 08:30 ET, the BLS released the US employment situation report for the month of May.
US Nonfarm Payrolls: 139k (Forecast 126k, Previous 177k, Revised 147K)
US Unemployment Rate:4.2% (Forecast 4.2%, Previous 4.2%)|
US Average Earnings YoY: 3.9% (Forecast 3.7%, Previous 3.8%, Revised 3.9%)
This stronger-than-expected headline NFP numbers caused strength across the US assets, as it increased investor sentiment on the strength of the US labour market, and reduced chances that the Fed will have both areas of its dual mandate in tension.
