(Bloomberg) -- Economists expect Friday’s U.S. payrolls data -- a critical input for Federal Reserve officials meeting at the end of July -- will show job growth recovered to a pace consistent with a still-strong labor market, albeit not as robust as last year.
Nonfarm employment probably increased by 160,000 in June, according to the Bloomberg survey median projection, an acceleration from May’s unexpectedly weak 75,000 gain and above the level economists consider sufficient to accommodate growth in the labor force. The unemployment rate is projected to remain at a 49-year low of 3.6% while annual wage gains probably firmed to 3.2%, moving back toward the best pace of the record-long economic expansion.
Estimates in Bloomberg’s payrolls survey range from 100,000 to 220,000, though temporary federal government hiring for the U.S. Census Bureau’s 2020 count could boost the total.
Other labor-market data flashed mixed signals Wednesday. Company hiring rebounded less than forecast in June, rising by 102,000 after a nine-year low of 41,000 in May, ADP Research Institute data showed. The Institute for Supply Management’s service-industry employment gauge dropped by the most in 16 months. Jobless claims, meanwhile, improved for a second time in three weeks, government data showed.
Here’s what economists are saying about Friday’s report, with payroll projections listed from low to high:
- 150,000 jobs, 3.7% unemployment, 3.1% annual wage growth
- “The jobs report will be among the most important data points considered by Fed officials as they mull whether to lower interest rates,” economists Carl Riccadonna and Yelena Shulyatyeva wrote in a note. “There is greater risk of June payrolls reflecting sustained weakness, which could be a signal that the health of the labor market is in jeopardy.”
Bank of America
- 155,000 jobs, 3.6% unemployment, 3.2% annual wage growth
- “The slowdown in manufacturing activity amid rising uncertainty around trade negotiations and weaker global demand likely weighed on hiring activity,” U.S. economist Michelle Meyer wrote. “We see some upside risk to our wage growth forecast as there were fewer working weekdays in June than normal during the reference period.”
- 164,000 jobs, 3.6% unemployment, 3.2% annual wage growth
- “Job growth will continue to cool as economic activity slows,” economists Lydia Boussour and Gregory Daco wrote. “While the labor market picture remains bright, a few pockets of weakness have become increasingly visible in both the goods and services-producing sectors.”
- 165,000 jobs, 3.6% unemployment, 3.2% annual wage growth
- “Hiring gains should improve across the board but remain measured,” senior economist Sam Bullard wrote. “Goods-producing sectors are poised to increase, as energy output has been rising, while construction should be underpinned by the recent pickup in homebuilding. Manufacturing hiring should be little changed on the month. Services employment should also rebound.”
- 169,000 jobs, 3.6% unemployment, 3.2% annual wage growth
- “In the June survey week, initial jobless claims continued to run at low levels, pointing to healthy labor market conditions,” wrote analysts led by chief U.S. economist Ellen Zentner. But, “the surprise in the ADP report implies downside risk.”
- 170,000 jobs, 3.6% unemployment, 3.1% annual wage growth
- “We suspect trade tensions weighed on employment growth,” economist Robert Martin writes. “Early in the month, trade tensions were mounting with rhetoric between the U.S. and China increasingly bellicose and with the president threatening to put tariffs on Mexican imports.”
- 185,000 jobs, 3.6% unemployment, 3.2% annual wage growth
- “After a burst in 2017 and 2018, payroll growth has slowed at least in part because of the tariff-related slowdown in manufacturing payrolls,” chief financial economist Ward McCarthy writes. “We expect June private-sector payrolls to be more solid than May payrolls and return toward trend, but not match the robust nature of some of the prior bounce-back months this cycle when payrolls rose well in excess of 200,000.”
- 194,000 jobs, 3.6% unemployment, 3.2% annual wage growth
- “An upside surprise should lead to markets pricing out some of the more-than 25 basis points of cuts priced for July,” economist Veronica Clark writes. “A solid reading is necessary to keep in place our out-of consensus call for no cut at the July FOMC.”
--With assistance from Reade Pickert and Chris Middleton.
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