The first half of this week will be quiet before the tempo picks up substantially with Thursday's ISM print and Friday's Non-Farm Payrolls which consensus expects to print at 675k on Friday up from previous 559k, if well below where the number has to be for the labor market to normalize by end 2021. Then, one week from Tuesday, Q2 earnings season begins.
In terms of what to expect from payrolls, Deutsche Bank economists 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 - 6.9m beneath its level in February 2020. Ahead of payrolls, the jobs plentiful / jobs hard-to-get series within tomorrow's June consumer confidence release will be interesting as it has been been highly correlated with the unemployment rate. Wednesday's ADP employment survey (+550k consensus vs. +978k) will also be watched even if has been well above payrolls of late.
The jobs data has been the one clear soft spot in US economic data points that has given Powell reason to hold the line despite a number of hawkish FOMC speeches last week and elevated inflation figures. Although one report wont severely alter the Chair's t,ming, we see a good number as further confirmation that we remain on track for policy hints to be dropped at the Jackson Hole meeting come late August.
We also get the US ISM report (Thurs) and consumer confidence (Tues). Both should hold at firm levels with the former again highlighting the supply chain strains that are putting up costs and boosting the chances that inflation stays higher...