"Outcomes Are Skewed Positively": Full Payrolls Preview And Market Reaction Matrix

The US is expected to add 104K nonfarm payrolls in July, a drop from the prior 147k print, but above the 80-
100k breakeven estimated by Fedʼs Barkin. The Unemployment Rate is seen at 4.2%, up from 4.1% previously, but still below the Fed year-end median projection of 4.5%, according to Newsquawk.

At his post-meeting press conference, Fed Chair Powell said that the unemployment rate is the figure to watch when looking at the labor market. Powell also noted that most Fed officials believe that the labor market is at or near maximum employment, but downside risks remain; however, he did appear more focused on the inflation side of the mandate. In the month, labor market proxies saw Jobless Claims ease from the prior reference period, while the S&P Global Employment report noted employment rose for a fifth straight month. ADP and June JOLTS were soft, while layoffs rose. The Fed's Beige Book saw employment increase very slightly overall, hiring remained cautious, but layoffs were limited, although more prevalent in manufacturing. Fed Chair Powell was quizzed about a possible rate cut at the September 18th FOMC confab, and he said the Fed has not made its decision yet, noting that there is a lot of data due before the meeting, with two more labor market reports (and one more PCE, two more CPI reports), this is one piece of the puzzle that will help shape expectations on a Fed rate cut in September.