NFP Preview: Forecasts from eight major banks for June jobs report, expectations above May's figures

The US Bureau of Labor Statistics (BLS) will release the June jobs report on Friday, July 2 at 12:30 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of eight major banks regarding the upcoming employment data. Following an increase of 559,000 in May, investors expect Nonfarm Payrolls to rise by 690,000 in June and see the Unemployment Rate edging lower to 5.7% from 5.8%.  

The dollar is holding onto gains as tensions mount ahead of June's Nonfarm Payrolls figures. But in the view of FXStreet's Analyst Yohay Elam, NFP could trigger a reversal of dollar gains.

Deutsche Bank

“We are forecasting a +700K increase in Nonfarm Payrolls following May’s +559K reading, which in turn should send the unemployment rate to a post-pandemic low of 5.7%. That said, even with a +700K increase, the total number of Nonfarm Payrolls would still be -6.9K beneath its level in February 2020.”

Westpac

“Judging by recent months, there is plenty of scope for surprise to the consensus forecast of a 700K rise in Nonfarm Payrolls and a dip in the unemployment rate to 5.7%. We look for 750K jobs to be created in the month of June, with further strong gains to follow in the second half.”

ING

“Consensus is paring its expectations down from million-plus figures last month to 700K now. Our house forecast is even more subdued at 550K – much the same as last month.  If we are closer to the mark than the consensus, then the recent spell of 10Y yields back above 1.5% could prove short-lived. But then again, this is payrolls, where anything could happen, so you can't rule out some upside surprise too.”

NBF

“Hiring should have strengthened in the month as the improving epidemiological situation allowed the reopening of broad swathes of the economy. Layoffs, meanwhile, could have gone down, judging from the decrease in initial jobless claims between the May and June reference periods. All told, payrolls may have increased 800K in the sixth month of the year.”

RBC Economics

“US Payroll survey will likely show another large employment gain (570K) with much of the hiring coming from gains in the hard hit leisure and hospitality sector.”

CIBC

“June should have seen some recruitment efforts by employers over previous months pay off in terms of attracting workers, while students off for the summer and new graduates could have provided a new pool of labor to draw from. Additionally, higher wages could have worked to entice many back into the labor force, resulting in an acceleration in hiring to 785K in June. That is in line with the steeper drop in continuing jobless claims seen through the reference week, but would still leave a 6.8mn gap to pre-covid levels of employment, as unemployment benefit top-ups remain in place in many large states.”

TDS

“We forecast up 800K, following 559K. Some acceleration in the private sector is suggested by the Homebase data, while government payrolls probably benefited from fewer than usual end-of-school-year layoffs. Our forecast implies a still-sizable 6.8mn net decline in payrolls from the pre-COVID level.”

ABN Amro

“We and consensus expect another month of solid jobs growth in the June payrolls report on Friday, with employment likely to rise by over 500K (ABN: 600K; consensus: 700K), and the unemployment rate potentially edging lower from the 5.8% reading in May (this will depend on how much participation recovers). Despite this, we think it is probably too soon to expect a significant easing of labour market bottlenecks in the June report.”