US Labor market conditions probably tightened further in July

The Bureau of Labor Statistics' (BLS) update on the employment situation in July will mark the first of a pair of reports on nationwide hiring activity ahead of what could be a pivotal Federal Open Market Committee (FOMC) meeting on September16-17. Analysis suggests that last month's soundings on job creation and unemployment will be consistent with "some" further improvement in labor markets that, along with other data over the next six weeks, will set the stage for a liftoff in administered rates at the upcoming FOMC gathering.

"We expect government statisticians to report that nonfarm payrolls expanded by 240,000 in July, besting the 221,000 average set during the spring quarter. Powered by a rebound in household employment during the reference period, the civilian jobless rate likely moved one tick lower to 5.2% - the lowest reading since April 2008", says Societe Generale.

Other portions of the establishment survey are expected to be positive as well. Reflecting previously discussed quirks associated with the timing of the BLS' canvass, average hourly earnings likely climbed by 0.2% in July, after no change in the preceding month.

"Owing to an extended five-week interval between survey periods, the mean work span of all private employees probably expanded by six minutes to 34.6 hours  the longest interval since February", added Societe Generale.