US NFP: Overall tone should be relatively weak - TDS

Research Team at TDS, suggests that the market’s focus this week will be on US payrolls on Friday.

Key Quotes

“As the Verizon workers’ strike unwinds, we expect the monthly pace of payrolls growth will benefit from the addition of the 34K previously displaced workers, pushing total employment growth to 175K in June, the same as consensus, and a marked improvement from the dismal 38K in May.

Despite the rebound in headline employment growth, the overall tone of this report should be relatively weak, reflecting the slowdown in underlying labour market momentum relative to the brisk pace earlier this year. Wage growth should remain tepid at 2.5% Y/Y (consensus: 2.7%) and, in line with consensus, TD expects the unemployment rate to tick modestly higher to 4.8%.”