US Labour Market Monitor: June report likely to be stronger than in recent months

US jobs report for June will probably turn out somewhat better than the previous three reports.
We expect employment rose 180,000 with the unemployment rate unchanged at 4.3% in June.
Average hourly earnings are expected to rise 0.3% m/m, implying an annual growth rate of 2.6% y/y (up from 2.5%).
While most labour market indicators are now stronger than during the recent upturn, the slack indicators still suggest there is some slack left in the labour market.
With the rate hike in June, the Fed sent a clear signal to us that it is not as data dependent as it claims to be, and is biased towards a normalisation of rates. The reason is Fed Chair Yellen's faith in the Phillips curve.
The problem is second-round effects have hit wage growth. When employees expect inflation to remain low, they can live with low wage nominal wage, as real wage growth may still be solid.

Danske Research Team Danske Bank A/S

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Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

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