Labor Market Watch: US jobs preview: bullish at halftime

Research evidence excerpt

Labor Market Watch: US jobs preview: bullish at halftime

Labor Force Participation rate

strength alongside low claims is notable. That said, we see downside risks: May's surge

HH: Householdin leisure & hospitality may have been driven by the World Cup or Memorial Day timing,

and if it was the latter, Jun could see payback. We could also see a larger reversal in local DHS: Department of Homeland

non-education gov’t jobs after May's outsized gain compared to our current estimate. Security

HH data: u-rate to remain at 4.3% AI: Artificial Intelligence

All eyes will be on the u-rate, which we expect will remain at 4.3%, with the LFPR also

BLS: Bureau of Labor Statistics

unchanged at 61.8%. Job growth has averaged well above our breakeven estimate. Yet

the u-rate has remained relatively stable because job growth in the HH Survey has been FOMC: Federal Open Market

much softer. With early QCEW data suggesting limited downside risk to payroll revisions, Committee

we think it is more likely that the HH Survey catches up to payrolls rather than vice

versa. So, there is a risk that continued strength in HH employment after the increase in PMI: Purchasing Managers’ Index

the May report could push the u-rate down to 4.2%. SC: Supreme Court

Fed: dissipating downside risks on labor to allow for hikes JOLTS: Job Openings and Labor

If our forecast is correct, this will be the fourth consecutive monthly increase in jobs, Turnover Survey

with private payrolls averaging a solid 109k this year. The labor market has stabilized,

with job growth above breakeven and the u-rate essentially flat over the past year. The QCEW: Quarterly Census of

downside labor risks that prompted last year's rate cuts have not materialized. Combined Employment and Wages