US non-farm payrolls preview: job growth to keep slowing
The upcoming payrolls report may well continue to show a weakening in the US jobs market, giving the Federal Reserve further reasons to contemplate a rate cut.
![US dollar](http://a.c-dn.net/c/content/dam/publicsites/igcom/uk/images/news-article-image-folder/Adobe_charts_07-11-2024.jpg/jcr:content/renditions/original-size.webp)
The upcoming July US jobs report is poised to cap off a busy week for markets. Following June's indication of a cooling job market, the July data is expected to continue this trend, further solidifying the case for a Federal Reserve (Fed) interest rate cut in September.
Expectations for non-farm payrolls
Analysts anticipate payrolls to have increased by approximately 178,000 in July, just below June's 206,000 gain and in line with the recent three-month average of 177,000. This figure, while still positive, represents a continued deceleration in job creation compared to the 'breakeven' pace of around 250,000 required to keep up with labour force growth.
Potential risks and influencing factors
Several factors may influence the July report, potentially skewing the numbers lower than consensus estimates. Hurricane Beryl, which made landfall during the survey week, could have a negative impact, particularly on the establishment survey. Additionally, the National Federation of Independent Business (NFIB) hiring intentions survey, which has been a reliable indicator this cycle, points to job growth at the lower end of forecasts, around 100,000.
Wage growth and unemployment expectations
Average hourly earnings are expected to maintain a 0.3% month-over-month (MoM) increase, with the annual rate cooling to 3.7% due to base effects. This moderation in wage growth would likely be viewed favourably by the Fed.
Implications for monetary policy
While the July jobs report is unlikely to dramatically alter the Fed's policy trajectory, it will play a crucial role in cementing expectations for a September rate cut. The report's various components, particularly wage growth and overall job creation, will be closely scrutinised for signs of continued labour market normalization.
Market impact and dollar outlook
The jobs report is anticipated to be a significant volatility event for financial markets. Traders are likely to interpret the data through the lens of longer-term Fed policy, potentially leading to the US dollar strengthening if current aggressive rate cut expectations are tempered. With over 65 basis points of cuts priced in by year-end, there's room for market expectations to align more closely with a more measured Fed approach.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
![](http://a.c-dn.net/c/content/dam/publicsites/igcom/uk/images/ContentImage/Forex global component NA banner.jpg/jcr:content/renditions/original-size.webp)
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.