Will a weak US jobs report change the Fed’s calculus for July?
US hiring is expected to have slowed in June, as economists bet that higher interest rates, slowing growth and a sharp pullback in stocks will have bitten into labour market growth.
The labour department is expected to report that the US added 275,000 jobs in June, according to a poll by Bloomberg, a step down from the 390,000 added in May. The unemployment rate is expected to remain steady at 3.6 per cent. Average hourly earnings are expected to have increased by 0.3 per cent month over month, also in line with May’s figure.
The Fed has argued that there is room to aggressively raise interest rates because of the strength of the US economy, including the jobs market. Evidence of a slowdown could potentially curb the Fed’s appetite for jumbo rises. Weak data in the US, including Institute for Supply Management manufacturing data on Friday, have helped bring market expectations of Fed policy lower.