Further improvement in US labor market expected in July

The BLS is expected to report that hiring activity quickened and that labor-market slack evaporated further in July. Our analysis suggests that government statisticians will report that nonagricultural entities added 240K net new workers last month, eclipsing the 220K average posted over the April-June span. 

While both initial and continuing jobless claims were little changed between the two latest canvassing periods, improved hiring breadth and weather conditions point to an increase from the 222K positions created in June.

"The household survey is expected to echo the anticipated upbeat payroll statistics. With those finding work (210K) projected to eclipse new entrants into the labor force (125K), the civilian unemployment rate likely moved one tick lower to a new cyclical low of 5.2%", says Societe Generale. 

The BLS broader U-6 unemployment measure, which includes marginally attached workers and those working part-time for economic reasons, probably will follow suit during the reference period, dipping to a seven-year low of 10.4%. 

"The civilian labor force participation rate likely will remain at 62.6% in July, the lowest level since October 1977", added Societe Generale.