Forecasting June’s US Nonfarm Payrolls: Projected 190k Increase and Anticipated Decline in Hourly Earnings

With US Federal Reserve Chairman Jerome Powell’s recent appearance in Sintra now concluded, attention is squarely focused on the upcoming release of the Nonfarm Payrolls (NFP) data for June, scheduled for Friday at 12:30 GMT by the Bureau of Labor Statistics (BLS).

The NFP report is anticipated to reveal a creation of 190,000 jobs in June, following a robust addition of 272,000 jobs in May. The unemployment rate is expected to remain steady at 4.0% for the same period. Average Hourly Earnings, a critical measure of wage inflation, are forecasted to show a year-over-year increase of 3.9% in June, slightly lower than the 4.1% growth seen in May.

Market analysts will scrutinize these key indicators as they provide insights into the potential timing of the Federal Reserve’s next monetary policy move.

Following Chairman Powell’s remarks at the European Central Bank Forum on Central Banking in Sintra, market expectations for a Fed rate cut in September increased. Powell acknowledged positive inflation trends but emphasized the need for more data before considering rate adjustments, signaling a dovish stance.

Additionally, the ADP National Employment Report indicated that the US private sector added 150,000 jobs in June, slightly below expectations but consistent with broader economic trends.

Looking ahead, market consensus for the NFP report centers around a headline figure of 190,000 jobs added, with a whisper number suggesting potential upside. Wage growth will be closely watched, with Average Hourly Earnings expected to rise by 0.3% month-over-month, influencing Fed rate cut expectations.

In the currency markets, the EUR/USD pair reacted strongly to dovish signals from the Fed, briefly breaching the 1.0800 mark. Attention now turns to the NFP report for further confirmation of labor market conditions and wage inflation trends.

A stronger-than-expected NFP report, coupled with higher wage inflation, could temper expectations of a September rate cut, potentially bolstering the US Dollar and prompting a correction in the EUR/USD pair towards 1.0700. Conversely, weaker employment data indicating labor market slack could reinforce expectations of a Fed rate cut, pushing the EUR/USD above 1.0850.

Technical analysis from FXStreet’s Dhwani Mehta suggests key levels for the EUR/USD pair, with resistance at the convergence of the 200-day and 100-day Simple Moving Averages (SMAs) around 1.0790, and support near the 21-day SMA at 1.0746.”


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