U.S. job growth is expected to remain strong in July as the country’s labor market gradually recovers from a pandemic that has resulted in the loss of millions of jobs.
The U.S. economy is forecast to add 870,000 jobs, after posting an increase of 850,000 in the previous month. Meanwhile, the unemployment rate is projected to decline to 5.7% after an unexpected increase recorded last month at 5.9%.
On Wednesday, investors were shocked by ADP’s private employment figures showing weaker -than -expected growth, but their concerns eased back after being shown by other economic data readings.
This can be seen from a survey by the Institute for Supply Management (ISM) which showed an increase in the employment component of the manufacturing and services sectors in the US last month.
Moreover, the average number of unemployment claims in July also dropped to 394,000 from 397,000 previously. This follows a drop of 385,000 last week.
Although the US is now threatened by a new wave of Covid-19 caused by the very rapid contagion of the Delta variant, but it may not affect the July report. Even so, analysts say it could slow the rate of economic growth and impact jobs.
If tonight’s data readings exceed market expectations and the unemployment rate also drops from 5.9%, the US dollar is expected to rise higher. If the opposite happens, the USD may return to reduce its profits.
