Preview: June non-farm payrolls by the numbers — the headwinds are starting to blow

July 04, 2024 at 07:36PM
What’s expected:

Consensus estimate +190K (Goldman Sachs at the low at +140K, FAO Economics at the high at +250K)

May +272K vs +185K expected

Private +160K estimate vs +229K prior

Unemployment rate consensus estimate: 4.0% vs 4.0% prior

Participation rate: 62.5% prior

Prior underemployment U6 7.4%

Avg hourly earnings y/y exp +3.9% y/y vs +4.1% prior

Avg hourly earnings m/m exp +0.3% vs +0.4% prior

Avg weekly hours exp 34.3 vs 34.3 prior

June jobs so far:

ADP report +150K vs +160K expected and +157K prior

ISM services employment 46.1 vs 47.1 (third-worst since pandemic)

ISM manufacturing employment 49.3 vs 51.1 prior

Challenger job cuts 48.8K vs 64.7K prior (four month low)

Philly employment -2.5 vs -7.9 prior (five month high)

Empire employment -8.7 vs -6.4 prior

Initial jobless claims survey week 239K (highest since Aug 2023)

I will be watching private payrolls much more closely than the headline as the JOLTS report has been indicating stronger government job openings and last month, government added 43K jobs.

Seasonally, 52% of June reports have missed esimates and 48% have beaten them, so there isn’t much skew. Though the average miss is 66K and the average beat 54K. The unemployment rate has seen above-consensus readings 42% of the time and below 27% with the remainder matching estimates.

In light of this report, people are talking about the Sahm Rule. Currently the three-month average of the unemployment rate is 0.37 percentage points above the minimum of the three-month moving average in the past year so we’re watching to see if that hits 0.50. I’m not a hard-and-fast believing in this kind of rule but it could get some talk if unemployment is higher.

This article was written by Adam Button at www.forexlive.com.