Here’s your full preview of the US jobs report

The June jobs report will be released at 8:30 a.m. ET on Friday.

Job creation in the US has slowed down this year, according to data from the Bureau of Labour Statistics. The difference between the number of people who gained jobs and those who were laid off or fired has averaged 160,000 since the start of this year.

That’s down from 187,000 in the same timeframe last year.

Via Bloomberg, here’s what Wall Street is expecting for June:

  • Nonfarm payrolls: +178,000
  • Unemployment rate: 4.3%
  • Average hourly earnings month-on-month: +0.3%
  • Average hourly earnings year-on-year: +2.6%
  • Average weekly hours worked: 34.4

Many economists expected fewer job gains because the unemployment rate was at a 16-year low, suggesting a lot of the spare capacity in the jobs market created by the recession has been absorbed.

But the slowdown is complicated by the fact that other data on the labour market tell a different story.

For example, ADP’s private-employment report, which is based on payrolls the firm processes instead of surveys, has shown an expansion in hiring this year. The gap between the jobs numbers from ADP and BLS on a six-month-average basis is the widest since at least 2012.

The Conference Board’s labour-market differential, the percentage of those who say jobs are plentiful less those who say they’re hard to get, widened to 14.8 points in June, the highest level since August 2001.

And the number of initial jobless claims continues to remain very low, at 248,000 this week.

That leaves the BLS jobs report as an outlier, although it’s the one that carries the most weight in markets. Its slowdown is “eroding the Fed’s justification for a further rise in rates,” said Lindsey Piegza, the chief economist at Stifel, in a note.

After two hikes in 2017, the Fed is expected to announce at least one more this year, likely in December. The justification for these hikes rests heavily on its assessment of labour-market conditions, since inflation, the Fed’s other mandate, is still below its 2% target, despite the low unemployment rate.

“Upward pressure on inflation from resource utilization [including labour] may be limited, as the relationship between these two variables appeared to be weaker than in previous decades” the Fed said in the minutes of its June meeting published on Wednesday.

The labour-force participation rate is another thing worth watching for in Friday’s jobs report, since it could give clues as to whether the unemployment rate is falling because fewer people are working, or because more people are getting job offers.