NFP Preview: 10 major banks expectations for July jobs report

Today, the US jobs report for July is due out at 12:30 GMT and as we get closer to that time, here are the expectations forecast by the economists and researchers of 10 major banks regarding the upcoming employment data. Most of the market specialists are expecting US NFP to post-reading in between +0.5 million and +2.25 million in July, while the consensus is +1.6 million reading. In addition, the unemployment rate is expected to fall to 10.5% from 11.1%.

Westpac

“We look for a gain of around 1,300K jobs in July, with a stalling of employment growth (or a potential decline) instead of a risk for August and beyond. The unemployment rate is also likely to fall further towards its GFC peak of 10% in July, we believe, to around 10.7%. Fluctuations in participation are a clear risk, however.” 

ING

“With respect to Friday’s US jobs report the timing of the data collection for payrolls is the week of the 12th of July so we still expect to see an increase given employment was rising in the second half of June and the first half of July - most of the job losses occurred in the second half of the month. We are more cautious than the market though and look for a figure closer to 750,000 versus the current consensus of 1.5 million. We wouldn’t rule out a negative number for August given the recent developments.”

NBF

“Hiring should have continued apace in the month judging from a decline in continuing claims between the June and the July reference periods. Unfortunately, these gains are likely to have been at least partially offset by yet more job losses at the end of the survey period, the latter related to the surge in coronavirus cases which led several states to halt or reverse the reopening of their economies. Taking these conflicting trends into account, we are calling for a 1,750K increase in payrolls. The household survey is expected to show a similarly-sized progression in employment which would be consistent with a decrease in the unemployment rate to 10.5%, assuming yet another rise in the participation rate.”

RBC

“We are penciling in a 2,250K million increase in payroll employment and the unemployment rate to be posted at 9.8%.”

CIBC

“Despite the deterioration in the outlook in recent weeks, both initial and continuing claims are still down relative to the previous month’s payrolls survey reference week. That suggests that 1.1 million jobs could have been added in July, a marked deceleration from the 4.8 million added in June. That would leave only 39% of the jobs lost through April recouped as of July, and 13.6 million fewer Americans employed than in February, proving that the US labor market has a long way to go to heal still. That could have sent the unemployment rate a few ticks lower to 10.8%, assuming a slight rise in the labor force participation rate. The bulk of jobs regained should continue to have been in lower-wage industries including retail trade, and leisure & hospitality, suggesting that the average aggregate wage could have fallen by 0.5%.”

TDS

“Timely data have signaled slowing in employment since the June sample week, albeit to different degrees. The mixed signals raise the potential for surprise in the payrolls data for July, but we see downside risk relative to the 1.6 million consensus. We forecast a relatively modest 0.5 million rise (modest relative to May and June), even with the government component artificially boosted by the seasonal factor; we forecast flat for private payrolls. We expect the unemployment rate to remain high, with growth in employment offset by another rise in the participation rate as active job searching among laid-off individuals probably rose again.”

Deutsche Bank

“We are looking for a further 900K gain in the headline. We also see the unemployment rate falling to 10.5% from 11.1%, in line with the median estimate. This data will give some insight into how the renewed spread of the coronavirus through the US, especially in the South and West have affected the US economy. The rest of the key data can be found in the day by day week ahead guide at the end.”

JP Morgan

“We believe further 1 million jobs may have been regained in July and, given the at least temporary expiration of enhanced unemployment benefits, August may see a similar gain. However, this should still leave the unemployment rate at above 10% and it is quite possible that measured unemployment rate ould rise in the months ahead as the pace of economic activity decelerates and more of those who have dropped out of the labor market return to look for employment.”

Wells Fargo

“Payroll growth is positioned to remain positive, yet slow materially following the past two months of a rapid rebound. We look for nonfarm employment to add 1.7 million jobs in July. Even with our above-consensus call, that would still leave employment 8.5% below its pre-pandemic level.”