Employment report preview: Critical reads for payrolls and LFPR

研报英文原文证据摘录

Employment report preview: Critical reads for payrolls and LFPR

IdeaM

Exhibit 5: Softer: ADP weekly payroll counts are slowing from Exhibit 6: Weakening: Household-survey payroll equivalent

their peak employment has been much weaker than payrolls in the last five

months

350 Monthly ch., 000s

Household-survey payroll-

300 equivalent employment

Payrolls

250 700

300 100

50 100

-100

-50

-300 -100

23 24 25 26

-500

New ADP weeklies (monthly rate) Monthly ADP Jun 25 Sep 25 Dec 25 Mar 26 Jun 26

Source: ADP and Morgan Stanley Research

Source: BLS and Morgan Stanley Research

The July employment report

In the establishment survey, payroll growth was stronger than we expected throughout

the spring before slowing fairly sharply in June. In the household survey, labor force

participation also appeared stronger beneath the headline figures: after correcting for

distortions from the population-control adjustment, aggregate participation was roughly

flat through May, while prime-age participation was edging higher. Both measures

weakened in June, leaving us looking to the upcoming employment report for a clearer

signal.

This is an important juncture for our labor-market forecast. We have been expecting

payroll gains to average 40k per month through the end of the year. If payrolls instead

continue at something closer to their spring pace, the unemployment rate would likely fall

to 4.0% by year-end, below our 4.3% forecast. However, if prime-age participation

resumes its rise of the past year, the resulting increase in labor supply could absorb faster

payroll growth and hold unemployment closer to its recent level.

We expect payroll growth to slow further over the coming months. We interpret the

early-2026 acceleration largely as payback for last year’s interruption in hiring.