by Calculated Risk on 7/07/2011 10:50:00 AM

Tomorrow the BLS will release the June Employment Situation Summary at 8:30 AM ET. Bloomberg is showing the consensus is for an increase of 110,000 payroll jobs in June, and for the unemployment rate to hold steady at 9.1%.

Last month I argued the consensus for payroll jobs added seemed too high; this month I think the consensus is too low. Note: Recently I've mostly been correct when I've taken the "under" for payroll jobs, but only right about half the time when I've taken the "over" - so flip a coin!

Here is a summary of recent data:

• The ADP employment report (private sector only) showed an increase of 157,000 payroll jobs in June. This was well above the 36,000 reported for May, but still below the 198,000 per month average for the first four months of 2011.

• Initial weekly unemployment claims averaged about 425,000 per week in June, about the same as in December 2010, and January and May 2011. The BLS reported an average of just 90 thousand payroll jobs added during those three months.

• The ISM manufacturing employment index increased to 59.9%, up from 58.2% in May, and the ISM non-manufacturing index increased slightly to 54.1%. Based on a historical correlation between the ISM indexes and the BLS employment report, these readings would suggest close to 200,000 private payroll jobs added for services and manufacturing in June.

• The final June Reuters / University of Michigan consumer sentiment index decreased to 71.5 from the preliminary reading of 71.8. This is down from 74.3 in May.

This is frequently coincident with improvements in the labor market - but also strongly related to gasoline prices. Of course gasoline prices were falling in June - so this suggests weakness in the labor market.

• And on the unemployment rate from Gallup: Gallup Finds U.S. Unemployment at 8.7% in June

Unemployment, as measured by Gallup without seasonal adjustment, is at 8.7% at the end of June -- similar to the 8.9% in mid-June, but down from 9.2% at the end of May. It is also lower than it was during the same period a year ago.

NOTE: The Gallup poll results are Not Seasonally Adjusted (NSA), so use with caution. Usually the NSA unemployment rate increases in June as teenagers join the labor force looking for summer jobs. A decline in the NSA unemployment from May suggests a decline in the SA rate too.

These indicators are mixed. Initial weekly unemployment claims and consumer sentiment suggests a pretty weak payroll report, but the ADP and ISM reports suggest a little better report. And of course state and local governments are still reducing payrolls.

My guess is payroll growth will still be weak in June - as expected following a housing bubble and financial crisis - but I'll take the over on payroll jobs and the under on the unemployment rate.