US job demand to show resilience as economy ‘cools’

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U.S. employers likely added workers at a softer but still healthy pace last month as the jobless rate held near its lowest level in decades, suggesting resilient labor demand even as the economy cools, according to Bloomberg.

The government’s latest payrolls report on Friday is expected to show an increase of 273,000 for June, based on the median of a Bloomberg survey. The unemployment rate is expected to remain at 3.6%, while average hourly earnings are likely to increase by 5% from a year ago.

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Wage growth running well above its long-term average and steady hiring suggest Federal Reserve policymakers will move ahead with another 75 basis point rate hike this month. Investors will get some insight into their thoughts in the minutes of the June meeting, which are expected to be released on Wednesday.

Data earlier in the day were expected to show that job openings remained up in May, indicating that companies are still looking to hire despite weakening economic activity and concerns about the outlook.

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The number of job vacancies is expected to fall to 11 million from 11.4 million in April. That’s still close to March’s record 11.9 million. The tightness in the labor market is a concern for Fed officials because it risks fueling a spiral of faster wage growth and inflation.

Among other US economic data in this holiday-shortened trading week: the Institute for Supply Management will release its services index for June and the Fed will report May consumer lending. The government’s trade deficit data for May is also expected.

Source: Capital

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