Wall Street Breakfast: Jobs Day Is Here34

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Economists expect the Labor Department to report 160K jobs additions in June, a notable bounce from May's soft tally of 75K but just under the average of 164K adds per month this year for the first five months. A relatively soft ADP report Wednesday of 102K new private payrolls has dampened expectations for today's payroll report, although a wildcard is how the temporary federal government hiring for the U.S. Census Bureau's 2020 count factors into the total. The nation's unemployment rate is forecast to stay at 3.6% and average hourly wages are expected to increase by 0.3% M/M. The pace of job growth has slowed a bit and the "prime age" employment rate still hasn't cracked 80%, giving the Fed some cover to lower rates. "Any weakness in payrolls for the second month would be a virtual green light for a Fed rate cut," noted MUFG Union Bank Chief Economist Chris Rupkey, while Citigroup said a solid reading falls in line with its out-of-consensus call for no rate cut at the FOMC meeting scheduled for July 31. Heading into the jobs report, trading on federal funds futures implies a 72% probability of a rate cut at the July meeting.

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