On Friday, the US official employment report will be published. Analysts from Wells Fargo, estimate that non-farm payroll increased by 170K in June, slightly below 180K, market consensus. They see a scenario of faster wage growth later this year.
“On trend, nonfarm employment growth has gradually been slowing since early 2015, as slack in the labor market continues to diminish and secular demographic headwinds limit growth in the labor force. Of late, the retail sector has been a major drag on employment growth, shedding 52,000 jobs over just the past three months. Education & health, leisure & hospitality and professional & business services have led job growth.”
“With the unemployment rate at a cycle-low of 4.3 percent and employment gradually decelerating, the attention on wage growth (or lack thereof) continues to grow. Average hourly wage growth remains well below the peak of previous cycles amid relatively benign inflation and sluggish labor productivity growth. With job openings at a record high and survey data suggesting positions are increasingly hard to fill, the stage is set for somewhat faster wage growth later this year.”