Key facts
- U.S. job growth likely picked up in July, with nonfarm payrolls expected to increase by 80,000.
- The unemployment rate is forecast to remain unchanged at 4.2% in July.
- Layoffs fell to a two-year low in July, with planned job cuts dropping 27% to 33,429.
- Worker productivity growth in the second quarter exceeded expectations, helping to moderate labor costs.
- Annual wage growth is expected to hold steady at 3.5%.
U.S. job growth likely picked up in July, offering reassurance that the labor market remained resilient and allowing the Federal Reserve to maintain its focus on inflation. The Labor Department's employment report is expected to show nonfarm payrolls increased by 80,000 last month, with the unemployment rate forecast to remain unchanged at 4.2%. Estimates for job gains range from 10,000 to 140,000.
Layoffs fell to a two-year low in July, with planned job cuts dropping 27% to 33,429. Worker productivity grew faster than expected in the second quarter, curbing labor costs. The labor force participation rate is anticipated to rebound after declining to a more than five-year low in June.
Economists noted that while employment gains have slowed from the spring, the labor market remains in a steady state. Annual wage growth is seen holding steady at 3.5%. An increase in payrolls in line with expectations could keep a September interest rate hike on the table for the Federal Reserve.