We didn’t get the ISM services number ahead of the release so that’s one less helpful reading ahead of the report. The worrisome one so far is ADP employment as it fell to the lowest since March 2023. What’s particularly concerning is that the drop in ADP is looking less like variance and more like a trend as it steadily deteriorates over a number of months.
In terms of seasonals, BMO reports that 42% of previous unemployment reads for June have been higher-than-expected, 27% have been lower-than-estimates, and 31% have matched the consensus while the headline is split 50/50 between upside and downside misses, though the downside misses tend to be slightly larger.
The market is already pricing in 30 bps of easing for the September report but just a 23% chance of a July move. I think it would take a negative number to really bump those July numbers up but even then, the Fed could see it as a one-off
