Non-farm preview: Economists expect 700,000 new jobs to be added in June, and the unemployment rate dropped to 5.6%. The initial effect of withdrawing from the federal unemployment benefit plan has begun to show
According to the Market Matrix (Matrix.net), the most important economic data this week is undoubtedly the non-farm to be released on Friday. If the data is largely different from the current market expectations, it is likely to cause sharp fluctuations in the total assets.
On Friday, the U.S. Bureau of Labor Statistics (BLS) will release its June employment situation report (ESR). It is expected to show that employment continues to grow at a large scale and unemployment rate declines, which will help alleviate the current severe labor shortage.
According to economists surveyed by Bloomberg, the number of non-farm employment in the United States may increase by 700,000 in June. This means job growth has accelerated significantly from 559,000 in May and the biggest increase since March. The unemployment rate is expected to drop to 5.6% from 5.8% in May. "Employment may surge again in June, with the data higher than 559,000 in May. Homebase data shows that private sector recruitment has accelerated, and government employment may benefit from less than average layoffs."
Although the 700,000 figure looks very high, even if expectations are met, there is still a gap of 7 million compared to the total pre-pandemic jobs. Among them, the hotel and catering industries that have been hit hardest by the epidemic have the largest gap.
At the same time, labor shortages are widely present in manufacturing and services. According to the Bureau of Labor Statistics (BLS) Job Vacancy and Labor Movement Survey (JOLTS) job vacancies data, the number of job vacancies in the United States in April was still as high as more than 9 million. This has forced some industry leaders to raise wages.
economists expect hourly wages to rise 3.6% year-on-year in June, higher than the 2% increase in May. "Strong demand and weak supply should continue to put upward pressure on wages. As employees find better opportunities, voluntary resignation rates will be higher." However, some economists point out that the factors that keep unemployed people on the sidelines will gradually decrease in the coming months. Most economists believe that child care, concerns about infection and federally enhanced unemployment benefits are the main obstacles to preventing people from returning to work. And now, more and more schools and child care institutions are beginning to reopen, vaccination rates are rising, and some states have cancelled federal unemployment benefits plans. "The labor supply may soon rebound. We found evidence that unemployment insurance applications are falling faster in states that exit the federal unemployment benefit program. According to the latest initial jobless claims, Alaska, Iowa, Mississippi and Missouri withdrew from the federal program on June 12, and those states have dropped faster than others."
She added: "With the other eight states exiting the program on June 19, and a total of 25 states by the end of the summer, more unemployed people should return to the labor market, which helps alleviate upward pressure on wages and helps meet strong labor demand."
Market Matrix (Ma) Liao Qing, an analyst at the US dollar index, said: "As of May, the total jobs have lost at least 7.6 million compared to before the epidemic. If the growth of 700,000/month is maintained, the Federal Reserve (Fed) will be very comfortable, which means it will take at least 10 months to restore the most basic full employment. Unless there is a million-level growth, the indicator is not expected to have a major market impact."
he added: "The real important data will be hourly wages. This is the real driving force for inflation. If the growth rate exceeds market expectations, it is likely to trigger inflation/the fear of early tightening of policies by the Federal Reserve and lead to the sell-off of risky assets."
+++ Follow +++ Bloomberg/Reuters/CNBC/WSJ Top News Sources First-hand Selected Information, Top Investment Banking Institutions Macro/Stock Index/Crude Oil/Gold Research Report @Market Matrix
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-