by Calculated Risk on 7/03/2013 04:22:00 PM

On Friday, at 8:30 AM ET, the BLS will release the employment report for June. The consensus is for an increase of 161,000 non-farm payroll jobs in June, and for the unemployment rate to decline to 7.5% from 7.6% in May.

Here is a summary of recent data:

• The ADP employment report showed an increase of 188,000 private sector payroll jobs in June. This was above expectations of 165,000 private sector payroll jobs added. The ADP report hasn't been very useful in predicting the BLS report for any one month. But in general, this suggests employment growth somewhat above expectations.

• The ISM manufacturing employment index decreased in June to 48.7% from 50.1% in April. A historical correlation between the ISM manufacturing employment index and the BLS employment report for manufacturing, suggests that private sector BLS reported payroll jobs for manufacturing decreased by close to 25,000 in June. The ADP report indicated a 1,000 increase for manufacturing jobs in June.

The ISM non-manufacturing (service) employment index increased in June to 54.7% from 50.1% in May. A historical correlation between the ISM service employment index and the BLS employment report for non-manufacturing, suggests that private sector BLS reported payroll jobs for non-manufacturing increased by about 185,000 in June.

Taken together, these surveys suggest only around 160,000 jobs added in June - in line with the consensus forecast.

• Initial weekly unemployment claims averaged about 345,000 in June. This was down slightly from 348,000 in May, and near the low for the year.

For the BLS reference week (includes the 12th of the month), initial claims were at 355,000; up from 344,000 in May.

• The final June Reuters / University of Michigan consumer sentiment index decreased to 84.1 from the May reading of 84.5. This is frequently coincident with changes in the labor market, but also strongly related to gasoline prices and other factors.

• The small business index from Intuit showed 25,000 payroll jobs added in June, Down from 35,000 in May. 

• And on the unemployment rate from Gallup: Unadjusted Unemployment Rate Static in June

Gallup's unadjusted unemployment rate for the U.S. workforce was 7.8% in June, statistically similar to the 7.9% in May, and the 8.0% in June 2012.

Gallup's seasonally adjusted U.S. unemployment rate for June, however, was 7.6%, down from 8.2% in May.

Note: So far the Gallup numbers haven't been very useful in predicting the BLS unemployment rate.

• Conclusion: The employment related data was slightly better in June than in May.  The ADP and ISM manufacturing reports suggest an increase in hiring. However weekly claims for the reference week were slightly higher in June than in May, and consumer sentiment decreased slightly.

There is always some randomness to the employment report, but my guess is the BLS will report close to the consensus of 161,000 jobs added in June.  A key will the unemployment rate to see if that is tracking the Fed's forecast for QE3 tapering.