by Calculated Risk on 7/02/2025 03:45:00 PM
On Thursday at 8:30 AM ET, the BLS will release the employment report for June. The consensus is for 129,000 jobs added, and for the unemployment rate to be unchanged at 4.2%. There were 139,000 jobs added in May, and the unemployment rate was at 4.2%.
From Goldman Sachs:
We do not place much weight on the ADP miss because of ADP’s limited correlation with BLS private payrolls over the last few years. We left our forecast for June nonfarm payroll growth unchanged at +85k ahead of tomorrow’s release. … We expect payroll growth to slow from its 135k 3-month average because big data indicators were soft … We forecast that the unemployment rate edged up to 4.3%—a low bar from an unrounded 4.24%—reflecting sequential increases in other measures of labor market slack.
emphasis added
From BofA:
June NFP are likely to rise by 95k. Although the initial claims increase in recent weeks can be attributed to seasonal volatility, continuing claims were also high during the survey week. We also see headwinds from weak college graduates hiring and summer job cuts for education & health workers. Additionally, leisure & hospitality job growth tends to slow in June when Memorial Day falls relatively earlier in the month in May (like this year). We expect the u-rate to rise a tenth to 4.3%.
• ADP Report: The ADP employment report showed 33,000 private sector jobs were lost in June. This was well below consensus forecasts and suggests job gains below consensus expectations, however, in general, ADP hasn’t been very useful in forecasting the BLS report.
• ISM Surveys: Note that the ISM indexes are diffusion indexes based on the number of firms hiring (not the number of hires). The ISM® manufacturing employment index was at 45.0%, down from 46.8% the previous month. This would suggest jobs lost in manufacturing. The ADP report indicated 15,000 manufacturing jobs added in June.
The ISM® services employment index for June will be released tomorrow.
• Unemployment Claims: The weekly claims report showed more initial unemployment claims during the reference week at 246,000 in June compared to 226,000 in May. This suggests layoffs in June were higher than in May.
• Conclusion: Over the last year, employment gains averaged 144 thousand per month – and that was probably the trend prior to policy changes. However, my guess is we will start to see the impact of policy uncertainty – a little more hiring hesitancy – and I’ll take the under for June.