US payrolls preview: June NFP seen slowing sharply to 110k after May’s surge
CBA's Global Economic & Markets Research team flagged the report poses upside risks to USD/JPY, arguing another upside surprise would likely prompt markets to reassess the US rate outlook further, potentially pushing the pair toward 165 and testing Japanese authorities' resolve to defend the yen. A weak print, by contrast, would support the case that May's 172k gain was distorted by one-off factors and ease pressure on the Fed to stay hawkish. With average hourly earnings growth expected to hold steady, the unemployment rate is likely to be the secondary focus alongside the headline payrolls number for gauging underlying labour market tightness.
--- US June payrolls seen slowing to 110k from May's 172k surge, with unemployment steady at 4.3%. CBA flags upside risk to USD/JPY on a beat.
Earlier:
Summary:
- June nonfarm payrolls are expected at 110k, down sharply from May's 172k
- The unemployment rate is expected to hold at 4.3%
- Average hourly earnings are expected to rise 0.3% month on month and 3.5% year on year, up slightly from 3.4% prior
- Average weekly hours are expected unchanged at 34.3
- May payrolls surprised materially to the upside, with 93k in back revisions to March and April lifting the 3-month average to 188k
- Household employment growth remained weak in May and the unemployment rate held at 4.3%
- CBA analysts say another upside surprise could push USD/JPY toward 165 and test Japanese authorities' resolve to defend the yen
US nonfarm payrolls data due Thursday are expected to show a sharp slowdown in June hiring, with consensus forecasts pointing to a gain of 110k jobs, down from May's outsized 172k increase. The unemployment rate is expected to hold steady at 4.3%, while average hourly earnings are forecast to rise 0.3% month on month and accelerate slightly to 3.5% year on year from 3.4% prior. Average weekly hours are seen unchanged at 34.3.
May's report set a high bar. According to Westpac, payrolls surprised materially to the upside that month, with the initial 172k gain compounded by 93k in back revisions to March and April, lifting the three month average payrolls pace above 188k, a rate of job growth well in excess of new labour supply. Household employment growth remained comparatively weak over the same period, however, and the unemployment rate was unchanged at 4.3%, while wage growth stayed benign.
June's print is expected to offer clarity on two open questions. The first is whether the labour market is simply marking time or genuinely tightening again after May's surge. The second is whether one-off factors, most notably the staging of the World Cup, were responsible for inflating May's headline figure. A soft June number would support the view that May was distorted by temporary effects, while a repeat upside surprise would strengthen the case for genuine renewed tightening.
The data carry currency implications as well as domestic policy relevance. CBA's Global Economic and Markets Research team says the report poses upside risks to USD/JPY, arguing that another strong payrolls beat would likely encourage markets to reassess the US interest rate outlook higher. That reassessment could push the pair toward 165 yen, a level analysts say would test Japanese authorities' resolve to defend the currency. With the unemployment rate and wage growth both expected to hold broadly steady, the headline payrolls figure is likely to be the dominant driver of market reaction on the day.
This article was written by Eamonn Sheridan at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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