The July 31 week will be narrowly focused on what is happening in the labor market. At his July 26 press briefing, Fed Chair Jerome Powell said the US labor market remains “very tight”. Despite 525 basis points worth of rate hikes since March 2022 and the highest fed funds target rate since 5.5 percent in January 2001, labor market conditions have not deteriorated appreciably. The unemployment rate in June 2023 was 3.6 percent. It has gone up and down a bit since the 3.6 percent in March 2022, but remains near historic lows and consistent with strong labor demand. Will the week’s reports related to the job market continue to tell a similar story?
The numbers on labor turnover (JOLTS) for June at 10:00 ET on Tuesday may lag the other data a bit, but the read on job openings will be a good indication if the imbalance in labor supply and demand is coming back into alignment. It is likely that total job openings will still be plentiful, just not quite so much as they have been.
The ADP employment report for July at 8:15 ET on Wednesday should provide a sense of the strength – or weakening – in private payroll employment. The Challenger report on layoff intentions in July at 7:30 ET on Thursday should show that businesses continue to be reluctant to lose experienced workers even if they are eliminating open positions or cutting back on plans for future hiring.
The big number for the week is the change in nonfarm payrolls in the July employment report at 8:30 ET on Friday. At this writing, the early consensus for payrolls is for around up 200,000, give or take 10 or 20 thousand. The July numbers don’t seem to be facing anything unusual. The extreme hot weather and poor air quality for much of the US in July could limit some hiring for outdoor work. On the other hand, some events like big name concerts and increased travel could offer those workers other employment.
Historically, the July report for nonfarm payrolls tends to come in under expectation, although it is often revised higher in the subsequent report. Most forecasters are looking for slower payroll growth in July, so a report on the soft side may not be too big a disappointment.
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