What to expect:
- Consensus estimate: +190K (Goldman Sachs is at the lowest +140K, FAO Economics is at the highest +250K)
- May +272K vs. +185K Prediction
- Undisclosed estimate: +160K vs. last time +229K
- Unemployment rate consensus forecast: 4.0% (previously 4.0%)
- Participation rate: 62.5% last time
- Previously underemployed U6 7.4%
- Average hourly wage: +3.9% year-on-year (+4.1% last time)
- Average hourly wage: +0.3% from previous month (+0.4% from previous month)
- Average weekly work hours: 34.3 vs. previous 34.3
June work so far:
- ADP report +150K, forecast +160K, vs. previous +157K
- ISM Services Employment 46.1 vs. 47.1 (third worst since the pandemic)
- ISM manufacturing employment: 49.3 vs. 51.1 last time
- Challenger cuts 48,800 jobs, down from 64,700 in the previous report (the lowest in four months)
- Philadelphia employment was -2.5 (a 5-month high) compared to -7.9 last month.
- Imperial Employment -8.7 vs. -6.4 (previously)
- Jobless claims surveyed for the week: 239,000 (highest since August 2023)
The JOLTS report shows government sector job openings are trending upward, with the government adding 43,000 jobs last month, so I’ll be watching the private sector payroll numbers more closely than the headlines.
Seasonally, there is no significant bias, with 52% of June reports below expectations and 48% above, but the average below expectations was 66,000 and the average above expectations was 54,000. The unemployment rate was above consensus expectations 42% of the time, below them 27% of the time, and in line with expectations the rest of the time.
This report has people talking about thumb rules. Currently, the 3-month average of the unemployment rate is 0.37 percentage points above the lowest 3-month moving average over the past year, so we’re watching to see if it hits 0.50. I’m not a firm believer in this kind of rule, but if unemployment is high, it might be something to talk about.