by Calculated Risk on 7/04/2024 09:47:00 AM

On Friday at 8:30 AM ET, the BLS will release the employment report for June. The consensus is for 180,000 jobs added, and for the unemployment rate to be unchanged at 4.0%.

There were 272,000 jobs added in May, and the unemployment rate was at 4.0%.

From Goldman Sachs:

Big Data measures ... indicate a soft pace of spring hiring, and we expect an additional drag from residual seasonality in the official payroll figures this Friday. We left our forecast for June nonfarm payroll unchanged at +140k (mom sa).
emphasis added

From BofA:

We forecast nonfarm payrolls rose by a solid 200k in June, a 72k decline from the 272k print in May and about 50k lower than the trailing three-month average. ... A slight slowdown in hiring is likely to result in the unemployment rate remaining at 4.0, while wage growth moderates a tenth to 0.3% m/m.

• ADP Report: The ADP employment report showed 150,000 private sector jobs were added in June.  This was below consensus forecasts and suggests job gains below consensus expectations, however, in general, ADP hasn't been very useful in forecasting the BLS report.

• ISM Surveys: Note that the ISM indexes are diffusion indexes based on the number of firms hiring (not the number of hires).  The ISM® manufacturing employment index decreased to 49.3%, down from 51.1% the previous month.   This would suggest about 20,000 jobs lost in manufacturing. The ADP report indicated 5,000 manufacturing jobs lost in June.

The ISM® services employment index decreased to 46.1%, from 47.1%. This would suggest 30,000 jobs lost in the service sector. Combined this suggests 50,000 jobs lost in June, far below consensus expectations.

• Unemployment Claims: The weekly claims report showed more initial unemployment claims during the reference week at 239,000 in June compared to 216,000 in May.  This suggests more layoffs in June compared to May.

• Conclusion: My guess is employment gains will be below consensus expectations.