U.S. June non-farm payroll likely to rise to 200k; Fed seen to hike twice more this year: Barclays Research

The United States’ non-farm payrolls is expected to have risen by 200k, in line with the year-to-date average monthly increase. Factors influencing our forecast include initial and continuing jobless claims, which continue to point to low rates of job separation, and other survey-based data on hiring.

Further, government payrolls is expected to rise by 10k and for private payrolls to increase by 190k. Recent protectionist moves by the administration, likely pose some downside risks to the forecast, but these effects are in the main forecast inputs. We will watch for signs that heightened policy uncertainty is weighing on business investment or hiring in the coming months.

Elsewhere, with job growth solid and participation rates stable, our outlook for a declining unemployment rate remains in place, and we forecast another 0.1pp drop in the U3 unemployment rate to 3.7 percent in June.

Average hourly earnings are projected to rise 0.3 percent m/m and 2.8 percent y/y, and average weekly hours is expected to remain unchanged at 34.5. Altogether, a report in line with Goldman’s forecast would be consistent with further normalization of the monetary policy stance.

"We maintain our view that the Fed will raise the target range for the federal funds rate two more times this year, in September and December," the report commented.