Posted by Government data on the U.S. labor market will take the spotlight this week, as investors look to see how the Federal Reserve’s aggressive campaign of interest rate hikes to cool inflation is impacting the labor market.
With unemployment relatively low and wages gaining in what has remained a tight labor market so far, continued strength would support the Fed’s stance that the economy should be strong enough to handle rising rates. On the flip side, signs of weakening could point to tougher times ahead.
The Labor Department’s highly-anticipated non-farm payrolls report is due for release on Friday, and is expected to show employers added 250,000 jobs in July, slowing from a gain of 372,000 in June. The unemployment rate is projected to remained unchanged at 3.6%.The average pace of hourly earnings gains was also likely unchanged in July at 0.3%.
On Tuesday, the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) report is expected to show job openings in June likely dropped to 11 million from 11.3 million in May.
On Thursday, the Labor Department is expected to report initial jobless claims for state unemployment benefits fell by 1,000 to 255,000 for the latest week. It is also likely to report continuing claims for the week ended July 23rd rose to 1.37 million from 1.36 million in the week before. New applications for unemployment benefits have held near the highest level of the year, in a sign that the tight labor market could be loosening. Last week’s report showed claims were at the highest level since November and above the pre-pandemic weekly average of 218,000.
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