US 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 closely watched employment report on Friday is also expected to show the unemployment rate unchanged at 4.2% last month even as the labor force participation rate is anticipated to have rebounded after declining to more than a five-year low in June.

Labor Market Remains Steady

Economists said though employment gains had slowed after a strong performance over spring, the labor market remained in a steady state, with employers neither eager to boost hiring nor to embark on mass layoffs. The labor market and overall economy have so far weathered the Iran war, now in its sixth month, with domestic demand growing at its fastest pace in more than three years in the second quarter.

Nonfarm payrolls likely increased by 80,000 last month after rising by 57,000, a Reuters survey of economists showed. Estimates ranged from as low as 10,000 to as high as 140,000 jobs added. Though the consensus estimate is below the average 111,000 monthly payroll gains over the second quarter, it would still be well above the roughly 20,000-50,000 jobs per month that economists say are needed to keep up with growth in the working-age population.

Rebound in Leisure and Hospitality Jobs

A rebound in leisure and hospitality payrolls was expected after a 61,000 drop, the largest since the COVID pandemic, which the government blamed on “weaker than usual seasonal hiring.” Healthcare was likely to lead the anticipated job growth in July. Marginal payroll gains were expected in manufacturing, though an acceleration could be in the cards after an Institute for Supply Management survey this week showed a measure of factory employment rebounded in July, hitting a four-year high.

Annual wage growth was seen holding steady at 3.5%. Economists said an increase in payrolls that was in line with expectations would keep a September interest rate on the table, especially if the unemployment rate fell to 4.1% as some anticipated.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.