2018 Economic Calendar
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Employment Situation  
Released On 8/3/2018 8:30:00 AM For Jul, 2018
PriorPrior RevisedConsensusConsensus RangeActual
Nonfarm Payrolls - M/M change213,000 248,000 190,000 150,000  to 215,000 157,000 
Unemployment Rate - Level4.0 %3.9 %3.8 % to 4.0 %3.9 %
Private Payrolls - M/M change202,000 234,000 184,000 148,000  to 204,000 170,000 
Manufacturing Payrolls - M/M change36,000 33,000 15,000 11,000  to 21,000 37,000 
Participation Rate - level62.9 %62.8 %62.7 % to 62.8 %62.9 %
Average Hourly Earnings - M/M change0.2 %0.1 %0.3 %0.2 % to 0.4 %0.3 %
Average Hourly Earnings - Y/Y change2.7 %2.7 %2.6 % to 2.8 %2.7 %
Av Workweek - All Employees34.5 hrs34.6 hrs34.5 hrs34.4 hrs to 34.5 hrs34.5 hrs

Highlights
Slowing job growth may be a welcome outcome given the risk that economic activity may be pressing up against capacity limits. A 157,000 rise in nonfarm payrolls for July is at the low end of Econoday's consensus range but is still healthy growth that is strong enough to absorb new entrants into the labor market. And revisions to prior months are favorable, a net 59,000 gain with June revised up to 248,000 and May higher at 268,000 in what were two very strong months for job growth.

The slowing in July is also favorable for the inflation outlook as average hourly earnings showed a little heat, up 0.3 percent which was expected but still firm. The year-on-year rate, at an as-expected 2.7 percent, has been steady which is a relief to Federal Reserve policy makers who are focused on keeping inflation stable at current rates.

The payroll breakdown is led by temporary help services which rose 28,000 in a very strong gain that indicates employers, stacked up with orders and backlogs, are scrambling to meet demand. Construction payrolls also standout with a strong 19,000 gain in the latest indication of strength in this sector. Manufacturing payrolls rose 37,000 to more than double Econoday's consensus with trade & transportation, reflecting strong activity in the supply chain, up 15,000. Weakness in payrolls comes from mining, down 4,000 after a long series of gains, and also government payrolls which fell 13,000 to nearly reverse the prior month's 14,000 jump.

The unemployment rate fell 1 tenth in July to 3.9 percent with the number of unemployed actively looking for a job down 284,000 to 6.280 million. The pool of available workers, which includes those wanting a job but aren't looking, fell 379,000 to 11.443 million which hints at capacity limits in the labor force, again underscoring the risk of wage inflation. The participation rate holds at 62.9 percent.

Though the headline is softer than expected, this is yet another positive employment report that speaks to the strength of the labor market and the success, so far, of Federal Reserve policy.

Consensus Outlook
Following a very strong May and June, nonfarm payrolls are expected to extend their strength to July where Econoday's consensus is calling for a 190,000 rise. The unemployment rate, at a July consensus of 3.9 percent, rose 2 tenths in June to 4.0 percent in what was a good sign as more people began to look for work. Despite all the strength, wages were flat in June and mixed results are expected for July with the monthly gain for average hourly earnings at a moderate at 0.3 percent consensus, not enough however to lift the year-on-year rate which is expected to hold at 2.7 percent. Private payrolls are seen rising 184,000 with manufacturing payrolls expected to show another solid increase at 15,000. The workweek is seen unchanged at 34.5 hours with the labor participation rate down 1 tenth to 62.8 percent.

Definition
The most closely watched of all economic indicators, the employment situation is a set of monthly labor market indicators based on two separate reports: the establishment survey which tracks 650,000 worksites and offers the nonfarm payroll and average hourly earnings headlines and the household survey which interviews 60,000 households and generates the unemployment rate.

Nonfarm payrolls track the number of part-time and full-time employees in both business and government. Average hourly earnings track employee pay while the average workweek, also part of the establishment survey, tracks the number of hours worked. The report's private payroll measure excludes government workers.

The unemployment rate measures the number of unemployed as a percentage of the labor force. In order to be counted as unemployed, one must be actively looking for work. Other commonly known data from the household survey include the labor supply and discouraged workers.  Why Investors Care
 
[Chart]
During the mature phase of an economic expansion, monthly payroll gains of 150,000 or so are considered healthy. Heading into recession, payroll gains begin to move below 100,000 and then, in confirmation of recession, into outright contraction. Coming out of recession, payroll gains are expected to surpass 250,000 per month.
Data Source: Haver Analytics
 
[Chart]
The unemployment rate measures those who have a job relative to those who are actively looking for a job. During recessions, those actively looking may grow discouraged, dropping out of the workforce and, in a counter- intuitive twist, putting downward pressure on the unemployment rate. During times of economic strength, workforce dropouts may regain their confidence and begin actively looking for a job once again which puts upward pressure on the unemployment rate.
Data Source: Haver Analytics
 
 

2018 Release Schedule
Released On: 1/52/23/94/65/46/17/68/39/710/511/212/7
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


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