US Labor Market Remains Solid Ahead of July Jobs Report
The US labor market remains solid, according to Danske Bank's research team. They predict that the United States will see an increase of 70k in nonfarm payrolls for July, with the unemployment rate remaining steady at 4.2%. Additionally, average hourly earnings are expected to rise by 0.3% month-over-month.
Danske Research notes that leading indicators still point towards solid labor market conditions, although weak labour supply growth also weighs on the employment growth outlook. The team emphasizes that the unemployment rate remains the Fed's primary focus. Furthermore, they highlight the productivity gains that have limited unit labor cost growth to 1.3% quarter-over-quarter.
In recent developments, the July Challenger Report showed a significant decline in announced layoffs, with 33,429 reported, the lowest level since July 2024. However, the share of AI-linked layoffs has continued to rise and now accounts for up to 33% of total layoffs. Initial and continuing jobless claims have remained at low levels.