Recent jobs data suggest a stable labor market, with US job openings decreasing slightly in June to 7.36 million from 7.54 million in May. This decrease was driven by pullbacks in healthcare, leisure and hospitality, wholesale trade, and business services, although vacancies in transportation and warehousing rose, and federal government postings climbed. Layoffs remained limited during this period.
Economists and strategists anticipate the July Nonfarm Payrolls to increase by 80,000, following June's 57,000. The Unemployment Rate is projected to hold steady at 4.2%, and annual wage inflation, measured by Average Hourly Earnings, is expected to remain unchanged at 3.5%. Despite these figures, BNY strategists emphasize sticky inflation and upcoming Consumer Price Index (CPI) releases as key inputs for the Fed's policy decisions.
Analysts like PGIM Fixed Income Executive Portfolio Advisor Michael Collins suggest that the jobs report will likely result in a stalemate for the Federal Reserve, keeping them on hold for now. Similarly, former White House National Economic Council Director Kevin Hassett believes that the jobs report should not prompt the Fed to raise interest rates. A weaker Nonfarm Payrolls print, however, could potentially lower two-year yields.
