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If you’re hoping for the Federal Reserve to announce more easy monetary policy at its August meeting, then tomorrow’s June jobs report will need to show a negative nonfarm payrolls number, Morgan Stanley’s David Greenlaw says.However, the odds that payrolls contracted in June are falling, as most economists, including Greenlaw, increased predictions after today’s ADP report showed private payrolls expanded by some 176,000 in June.
In his words (emphasis added):
Finally, it’s worth noting that this will be the last employment report that will be released ahead of the Aug 1 FOMC announcement. Clearly, Fed officials are placing a lot of emphasis on labour market conditions these days but, in our view, the June jobs report is going to have to be very weak (perhaps along the lines of payrolls below zero) in order to open the door for QE3 – or something similar — at the next meeting.