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Party time.The June jobs report is out in just a few short hours (8:30 AM ET), and the entire world is watching.
Let’s run down the consensus headlines, and how they compare to the prior month (via Bloomberg).
- Total change in non-farm payrolls: Estimate: 105K, Prior: 54K
- Change in private payrolls: Estimate 132K, Prior: 83K
- Unemployment rate: Estimate: 9.1%, Prior: 9.1%
- Average hourly earnings growth: Estimate 0.2%, Prior: 0.3%
- Change in manufacturing payrolls: 5K, Prior: -5K
Now for some context: Throughout April and May, the market got buffeted by a series of disappointing numbers, leading to a big market swoon.
But things have come back nicely since the market bottomed on June 20. Stocks have had an amazing 8-sessions run, and the data has surprised to the upside. Yesterday’s ADP report has provided a very nice jolt of optimism. And in fact, given how fast optimism has come back, the “whisper” number for today’s report is probably higher than the headline 105K, which is to say that if we only get 105K, it will be disappointing to some.
In early going right now, markets are drifting lower, though again, nothing really matters too much until the number comes out (or so it would seem).
Meanwhile, here’s Goldman’s commentary:
Most labour market indicators have been stable or better in recent weeks. New jobless claims ranged between 418,000-432,000 for seven weeks, job advertising has held at reasonably robust levels, the employment indexes in both of the ISM surveys improved (albeit only marginally for the non-manufacturing index), and the ADP report on private-sector employment growth was much firmer. Given this information, and the special factors that weighed on May’s report, we expect an above-consensus gain of 125,000 payroll jobs in June. This implies a private sector payroll gain of around 150,000 jobs, given the recent pace of job cuts in the government sector.
The unemployment rate is a fairly close call, but we expect it to drop to 9.0%. The bar for improvement is quite low, since the unrounded unemployment rate was 9.053% in May. The unemployment rate is determined from the household survey, which may show a very different rate of job growth than the payroll survey–perhaps even with the opposite sign–in a given month. But given our forecast for the payroll report, it makes sense to assume at least some gain in the household survey as well, and probably enough to exceed growth in the labour force (which has been flat on average thus far in 2011). Reflecting the substantial slack in the labour market, we expect earnings to be soft, with average hourly earnings up just 0.1% in June (the average over the past year is +0.15%).
Obviously, we’ll be covering LIVE.