Monthly jobs data, arguably the most important gauge for both the Federal Reserve and the American people, is expected to show that US firms are continuing to hire at a solid pace as a virtuous circle of economic activity and growth takes hold.
US employment already returned to its pre-recession peak in May, with non-farm job gains of 217,000. Economists polled by Reuters on average expect that to dip to 213,000 in June. That would be a fifth straight month of job gains above 200,000, a run unmatched since the September 1999-January 2000 period, just before the dot-com bubble burst. If we settle at a 215-220 (thousand) pace that would be consistent with a transition to a faster pace of growth of around 3%, said Lewis Alexander, US chief economist at Nomura.
Alexander said he recognised risks, including rising oil prices from the conflict in Iraq and Iraqi conflict and a possible messy end to China's housing boom. An impact is possible, but I don't think all that likely. It would have to go very badly to materially impact the US outlook, he said.
The jobs figures on Thursday, also set to feature a steady unemployment rate of 6.3%, will conclude a shortened week for the United States, which breaks for Independence Day on Friday.