What to Expect in Today’s Jobs Numbers
July 6, 2018 1:41 pmVideo
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Today, at 08:30 am (Eastern Time), the Bureau of Labor Statistics (BLS) will release the closely-watched jobs numbers for the month of May. This will be an important number coming after last month’s record-breaking number. In April, the US economy created more than 223K jobs, leading the New York Times to lack words to describe the record-breaking number.
Today, traders will first and foremost be focusing on the Trump Twitter feed. Last month, he broke with precedence when he sent a tweet about the jobs numbers before they were released officially. Will he do the same today? What if he does not, will it mean that the numbers will not be good?
The numbers released today will come a day after the disappointing numbers from the Automatic Data Processor (ADP). Yesterday, the numbers showed that the private sector payrolls increased by 177K, which was lower than the expected 190K. Traders will hope that the ADP numbers were wrong; as they often are.
Today, traders expect that the economy added 200K jobs in May. This will be a good number but will be lower than last month’s 238K. They expect that the unemployment rate is expected to remain at 3.8%, which is still a very good number.
While these two numbers will be watched closely, traders will be looking at the wage growth numbers. In this, they will want to know whether wages are growing which is a good indicator of inflation. They expect the wages to grow by 0.3%, which was similar to last week. The average hourly wages are expected to grow by an annual rate of 2.8% with the average number of weekly hours expected to remain at 34.5. They also be looking at the U6 unemployment rate, which is viewed by some as the real unemployment rate. They expect it to remain at 3.6%.
Another important number that will be on focus today will be the participation rate. This number shows the percentage of people who are actively looking for work. They expect the participation rate to remain at 62.7%. An increase in participation rate is seen as a good thing for the economy.
The state of the US economy has been well-documented. In the past, we have read about how difficult it has become for companies to find people to employ. Still, the challenge in the workforce remains on the skills mismatch, the gap between the senior management and the operational staff, and the gap between the wages of men and women. Policymakers are now grappling with how to address these issues.
The jobs numbers also come after yesterday’s minutes from the Federal Reserve. The minutes showed that the officials remained upbeat about the US economy and the job market. They reiterated their desire to raise interest rates two more times.
Meanwhile, the Canadian government will also release the jobs numbers. As you recall, last month, they reported that he unemployment rate remained at 5.8% but the economy lost employees. Today, traders will be looking for the economy to add more people. This will likely provide the needed support for the Canadian dollar.
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