U.S. nonfarm payroll employment likely rose in June, jobless rate to have remained unchanged

U.S. nonfarm payroll employment is likely to have picked up in June. According to a TD Economics research report, the nonfarm payroll employment is likely to have picked up by 170k pace in June after recording a disappointing rise of 138k in May. Gains above 200k are likely to be fewer and far between at this stage, though upside surprises cannot be excluded. However, job gains are likely to remain above its breakeven pace required for additional declines in slack.

Jobless claims have steadied near record lows, while household confidence has remained strong and business survey indicators have also kept recent strength. On balance, both hard data and surveys indicate towards a June pickup.

Meanwhile, the U.S. jobless rate is likely to have stayed the same at 4.3 percent. The number of unemployed workers dropped for four straight months through May, which at this stage of the cycle seems unsustainable, noted TD Economics.

With some stabilization in June, along with ongoing employment growth, there are risks as balanced for a stable reading for the jobless rate. On wages, calendar effects indicate towards a stronger 0.3 percent sequential rise in average hourly earnings, leaving the year-on-year pace higher at 2.7 percent.

“With realized inflation becoming a more deciding factor on the path of future rate hikes, wage growth will be key to watch in the coming months amid heightened concerns over the Phillips curve”, added TD Economics.

At 21:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was slightly bullish at 51.2307. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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