US: Strengthening employment conditions - HSBC

Ryan Wang, Economist at HSBC, notes that the US nonfarm payrolls rose 222,000 in June (consensus 178,000) as a +47,000 net revision to the prior two months added to the positive surprise which points to strengthening employment conditions.

Key Quotes

“Hourly earnings rose 0.2% (consensus 0.3%) and are up just 2.5% in the past year, highlighting that wage pressures remain modest. The unemployment rate edged up to 4.4% from 4.3% but is still down from 4.8% as recently as January.”

“The overall report shows strengthening labor market conditions; hence, the data are unlikely to change the outlook for Fed policy. We expect the FOMC to announce the start of balance sheet disinvestment in September and to deliver another 25bp rate hike in December.”