Nonfarm Payrolls Preview: New Jobs Expected at 80K, Unemployment Rate Seen at 4.2%

Odaily Planet Daily News: Tonight at 20:30, the U.S. July nonfarm payrolls report will be released. The market expects job gains to rebound to 80,000, but ADP only added 44,000. Goldman Sachs also warns that July data often falls short of expectations. More critically, behind the stable unemployment rate, the labor force participation rate has dropped to its lowest level since 2021.

According to the private sector employment data released this week, corporate hiring intentions have weakened, and the resilience of the job market is more attributable to a simultaneous slowdown in both labor supply and demand, rather than a clear strengthening of hiring activity.

Data from Reuters shows that economists expect U.S. nonfarm payrolls to increase by 80,000 in July, up from a gain of 57,000 in June. The unemployment rate is expected to hold at 4.2%, while average hourly earnings are expected to remain at 3.5% year-over-year and 0.3% month-over-month. A survey by Dow Jones Newswires and The Wall Street Journal shows that economists on average expect 83,000 new jobs to be added in July, also higher than the previous month. Although the market generally expects July job growth to improve compared to June, economists caution that the report still carries the risk of falling short of expectations. Goldman Sachs economists point out that July nonfarm payrolls data has frequently come in below market expectations in recent years, while employment growth in prior months is also prone to larger revisions.