US DATA: Non-Health Private Payrolls Stalled In Three Months To July
Aug-01 16:01
- Returning to the establishment survey of the payrolls report, private payrolls increased 83k (sa) in July after a heavy two-month downward revision of -139k which saw a particularly soft 3k in June.
- Private payrolls growth remains particularly reliant on the cyclically insensitive health & social assistance category, which increased 73k after 59k in June.
- Private payrolls ex health & social assistance only increased 10k in July, following -56k in June and -3k in May.
- Those large downward revisions have changed understanding of recent trends within the details as well, with the one-month diffusion index improving to 51.2% in July after three months sub-50% including 47.2% in July (lowest since 46.8% in Jul 2024, lowest since Mar/Apr 2020 and before that early 2010).
- Put differently, slightly more of the 250 private sector industries increased on the month in July than those that decreased, after three months of net declines.
- Within the aggregate industries, retail trade led non-health increases on the month with 16k after two months averaging -15k, whilst manufacturing (-11k), wholesale trade (-8k) and professional & business services (-14k) remained under pressure.
- Also of note are discretionary areas such as “food & drinking places” where job gains have dried up, with two months of no job creation.
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LOOK AHEAD: Thursday Data Calendar: Jam-Packed
Jul-02 16:00
Busy day tomorrow: Aside from weekly claims, Thursday's session includes the June employment report due to Friday's 4th of July holiday closure.
- US Data/Speaker Calendar (prior, estimate)
- 07/03 0830 Trade Balance (-$61.6B, -$71.0B)
- 07/03 0830 Initial Jobless Claims (236k, 241k), Continuing Claims (1.974M, 1.962M)
- 07/03 0830 Change in Nonfarm Payrolls (139k, 110k), Private Payrolls (140k, 102k)
- 07/03 0830 Unemployment Rate (4.2%, 4.3%), Participation Rate (62.4%, 62.5%)
- 07/03 0945 S&P Global US Services PMI (53.1, 53.1), Comp (52.8, --)
- 07/03 1000 ISM Services Index (49.9, 50.7), Prices Paid (68.7, 68.6)
- 07/03 1000 ISM Services New Orders (46.4, --), Employ (50.7, --)
- 07/03 1000 Factory Orders (-0.5%, 0.2%), Ex-Trans (-0.5%, 0.2%)
- 07/03 1000 Durable Goods Orders (16.4%, 16.4%), Ex-Trans (0.5%, 0.5%)
- 07/03 1000 Cap Goods Orders Nondef Ex Air (1.7%, 1.7%), Ship (0.5%, 0.5%)
- 07/03 1130 Atl Fed Bostic on monetary policy, Frankfurt (text, Q&A)
- 07/03 1000 US Tsy $55B 4W & $45B 8W bill auctions
- Source: Bloomberg Finance L.P. / MNI
OPTIONS: Larger FX Option Pipeline
Jul-02 15:55
- EUR/USD: Jul07 $1.1770(E1.7bln); Jul08 $1.1700(E1.1bln)
- USD/JPY: Jul04 Y143.45-60($1.0bln); Jul08 Y142.60-75($1.0bln)
- AUD/USD: Jul04 $0.6500(A$1.2bln), $0.6600(A$2.6bln)
FRANCE: Centre-Left Meets On Potential Unity Candidate For 2027
Jul-02 15:53
Senior figures from the centre-left of French politics are meeting to "discuss the conditions for a joint candidacy" ahead of the 2027 presidential election. In the last two presidential elections in 2017 and 2022, candidates from the centre-left/environmentalist left have come behind far-left La France Insoumise (LFI) leader Jean-Luc Melenchon. This has raised the prospect of parties of the moderate left uniting to try to boost their prospects.
- The meeting includes: Socialist Party (PS) leader Olivier Faure, president of the PS in the National Assembly Boris Vallud, Ecologist Greens leader Marine Tondelier, Francois Ruffin and Clementine Autain (lawmakers who both left LFI after falling out with Melenchon), prime ministerial candidate for the left-wing New Popular Front alliance Lucie Castets, and former PS presidential candidate Segolene Royal.
- Opinion polling indicates that whoever is the presidential candidate for the far-right Rassemblement National (National Rally, RN) will make the second round run-off, with the question then being who is their challenger. The centrist Ensemble bloc does not have a clear successor with incumbent President Emmanuel Macron term-limited.
- There is a chance of a four-way contest (centre-left vs. populist far-left vs. centrists vs. conservatives) to get into the run-off in 2027. As such, a unity candidate joining the PS, Ecologists and other anti-Melenchon leftists could have a strong chance of making the second round.
- Given that the 'Republican front' (voters backing any candidate but the RN) has held in recent elections, a unity candidate would have a strong chance of winning the presidency.
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