Its US NFP day (a day early due to holiday Friday) – nonfarm payroll preview

US NFP is due at 1230GMTon Thursday 2 July 2020  

What to expect preview via TD, in brief:

  • estimate up 4.0m, following the 2.5mn gain in May
  • A sizable gain has been signalled by Fed economists’ analyses
  • a 6.5mn rise over two months would reverse less than a third of the 22mn plunge in the previous two months, and the renewed uptrend in COVID cases cautions against extrapolating
  • Indeed, the Homebase data show upward momentum stalling in the two weeks since the sample week
  • The FX backdrop is starkly different ahead of this payrolls data compared to the surprise gain in last month’s report. The COVID curve was flattening as opposed to surging now. The USD was in broad-based retreat as global equity markets were outpacing the US compared to a much more mixed performance for FX

And, Scotia, forecast is also +4m

  • but at these elevated levels of changes and volatility it wouldn’t surprise me in the least to be off by a million-perhaps many-but hopefully still well into positive territory
  • Initial jobless claims have amounted to around ten million more folks claiming assistance between the May and June reference periods for the report and so that doesn’t lean toward job growth. Continuing claims have fallen by around one million which suggests either benefits ran out or they went back to work. Neither gauge was useful in terms of predicting the 2.5 million jobs created in the May nonfarm payrolls report or the 3.8 million that the companion household survey registered. 
  • The employment sub-indices to the ISM-manufacturing and ISM nonmanufacturing reports during the previous round also increased a touch which may suggest improvement, but hiring is one thing; recalling already hired workers is another.