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US jobs report preview points to stable labor market in July
Forecasts call for 95K payroll gains, hourly earnings up 0.3% in July, and the unemployment rate steady at 4.2%, implying limited wage driven inflation pressure.
Action Forex previewed next week’s U.S. employment report, expecting labor conditions to remain broadly stable in July. The base case includes modest job growth, an unchanged unemployment rate, and wage growth seen as consistent with limited labor driven inflation pressure.
The outlet expects nonfarm payroll growth to average about 95K in July, after an average of 92K over the first half of the year. It also cites signals that layoffs remain limited, including improved small business hiring plans in June and lower initial jobless claims between survey weeks.
On inflation related implications, Action Forex forecasts average hourly earnings to rise 0.3% in July, keeping the year over year rate at 3.5%. It expects the unemployment rate to hold at 4.2%, while noting upside risk to that forecast if labor force participation rebounds after a sharp drop in June.
Internationally, the preview also points to central bank divergence, including expectations that Canada’s labor market supports a patient Bank of Canada stance. For emerging markets, it flags a potential 25 bps rate cut by Brazil’s central bank, a rate hold for India’s RBI despite elevated inflation and rupee weakness, and a Banxico hold as stronger Q2 growth fades later in the year.