U.S. nonfarm payrolls likely to have risen in June, jobless rate likely dropped to 4.2 pct

The U.S. nonfarm payrolls are likely to have risen in June. According to a Barclays research report, the nonfarm payrolls are expected to have grown 185k, while private payrolls are likely to have risen 180k. Factors influencing the projection include initial claims that continue to point towards low rates of job separation, and the timing of the survey week in May.

The data for initial claims have been pointing toward stronger payroll growth for some time. The calendar-day effects are believed to have held back reported employment last month. The survey week for the May employment report dropped in the second week of the month and signifies that the survey might not have captured several returning college-aged workers to the labor force, stated Barclays.

Historically, employment in May is stronger when the survey week drops in the third week of the month as opposed to the second week. History implies any shortfall in May employment growth because of calendar-day effects is greatly reversed in June. Also, some rebound is likely to have taken place in June, said Barlcays.

“We look for average hourly earnings to increase by 0.3 percent m/m (2.6 percent y/y) and for the unemployment rate to decline by one-tenth to 4.2 percent. Finally, we expect average weekly hours to remain unchanged at 34.4”, added Barclays.

At 22:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was bearish at -76.6361. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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