Slowdown in US job creation expected today
|A rather underwhelming set of economic figures has kept the dollar firmly on the back foot in the past couple of trading sessions.
Wednesday’s ISM services PMI was a notable disappointment. The index tumbled to a near one-year low 49.9 in May, with respondents explicitly noting that the tariff uncertainty was weighing on business activity by delaying investment decisions.
All the while, neither this week’s ADP employment data (+37k vs. +115k estimate), nor the weekly jobless claims print (a eight-month high 247k vs. 235k) have inspired confidence in the health of the country’s labour market ahead of today’s all-important NFP report.
This afternoon’s payrolls data takes on huge significance given that it will be the first full month of data encompassing the post-Liberation Day period. Most signs are pointing to a slowdown in job creation, and expectations are quite low, with economists betting on a number around the 130k level.
A miss here would put the Federal Reserve in an increasingly delicate spot, as it balances the inflation implications of the tariffs on the one hand, and the growth consequences on the other.
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