US NFP data for July should show a healthy improvement in jobs - Scotiabank

Research Team at Scotiabank, suggests that the US nonfarm payrolls data for July should show a healthy improvement in jobs, and we’re forecasting a 210k print on the month.

Key Quotes

“The main driver of our model is trend reversion. Even as June brought a large gain in non-farm payrolls, it only somewhat made up for a very soft spell mid-year. We think that the trend in payrolls is above 200k, and we think that nonfarm payrolls thus still have some trend-reverting to do. Coincident indicators point to the same as initial jobless claims were quite low on the month, averaging 254k claims, which is extremely subdued, during the first two full weeks of the month.

Trade data for the month of June should show a widening in the trade balance after the advanced trade in goods balance widened on the month, in line with moves in a variety of coincident indicators. On that front, shipments of durable goods were on the weak side and both purchases and production of autos were on the soft side. All in all, we expect that exports will slow a bit more than imports and the trade balance will widen to USD -43bn.

The ISM index for the month of July should show… not a whole lot. We expect that the ISM index will drop modestly in July vs. June to a reading of 55.5 in line with declines in some of the regional Federal Reserve manufacturing indices.”