NFP Prep

Forecasts For July Data
US Nonfarm Payrolls Forecast 104k, Previous 147k Range 170k / 0k
US Unemployment Rate Forecast 4.2%, Previous 4.1% Range 4.3% / 4%
US Average Earnings YoY Forecast 3.8%, Previosu 3.7% Range 3.9% / 3.4%

June Data & Market Reaction
US Nonfarm Payrolls Actual 147k (Forecast 106k, Previous 139k, Revised 144k)
US Unemployment Rate Actual 4.1% (Forecast 4.3%, Previous 4.2%)
US Average Earnings YoY Actual 3.7% (Forecast 3.8%, Previous 3.9%, Revision 3.8%)

Goldman Sachs
We estimate nonfarm payrolls rose by 100k in July, roughly in line with consensus of 105k and below the three-month average of +150k. On the positive side, big data indicators showed a rebound in private sector job growth, though to a still soft pace. On the negative side, we expect unchanged government payrolls, reflecting a 15k decline in federal government payrolls that offsets a 15k increase in state and local government payrolls. We expect both partial payback for the June spike in state and local education hiring and a downward revision to the June increase, which likely resulted in part from residual seasonality.
We estimate that the unemployment rate rebounded to 4.2% on a rounded basis, reflecting the signal from other measures of labor market slack such as continuing jobless claims. We estimate average hourly earnings rose 0.25% (month-over-month, seasonally adjusted), reflecting negative calendar effects.

ING
Today’s jobs data presents the best chance for the dollar to take an extra leap higher before some pre-CPI (12 August) calm leaves the dollar exposed to medium-term bearish repositioning. Payrolls’ consensus is 104k, the whisper number is 120k, and our call 115k. Fed Chair Jay Powell has placed greater emphasis on the unemployment rate, which is expected to rise marginally from 4.1% to 4.2% – hardly enough to sound the alarm on the jobs market. We expect a 115k, 4.2% scenario as only marginally positive for the dollar. After this week’s big run, it could simply lead to some consolidation. ISM manufacturing for July is also released today and is expected to have ticked higher, but the impact on FX should be considerably more limited.

Berenburg
The upcoming nonfarm payroll report should not alter the Fed’s view, or ours, of a still healthy labour market, nor offer any economic reason to cut interest rates soon. We expect nonfarm employment in the US to rise by 140k mom in July (Bloomberg consensus: 109k), after a 147k gain in June, with the unemployment rate holding at 4.1% (Bloomberg consensus: 4.2%). Since the start of the year – and even in April, when recession fears gained traction — we have pushed back against the narrative of a collapse in the labour market. The job market no longer reacts as much to interest rates as it once did and shows greater resilience to economic shocks (see: one balanced jobs report a month keeps the Fed away). Businesses, still scarred by post-pandemic labour shortages, remain reluctant to fire workers. The immigration crackdown acts as a negative labour supply shock and helps prevent a spike in arguably the most important jobs market metric — the unemployment rate. While “soft” labour market data remains weak, with consumers pessimistic about job prospects and businesses’ hiring intentions still in recessionary territory, the post-pandemic economy has shown that sentiment does not necessarily drive behaviour. Weak surveys alone do not justify forecasts of a labour market meltdown. Since late February, when recession talks resurfaced, the unemployment rate has held steady at 4.1% and the US has added nearly 600k jobs. That said, the US job market is certainly not recession-proof, and the risk to our forecast of it remaining modestly healthy lies in persistent and high uncertainty in the macro environment, an equity market correction without a quick rebound, and an escalating trade war.

Other Forecasts for NFP
Scotiabank: 150k
BofA: 60k
Citi: 100k