US NFP: Median guesstimate is for an increase of around 175k - BBH

Research Team at BBH, suggests that the US July employment report caps the week and the economists do not expect a repeat of June's 287k jump, not that they had expected that either.

Key Quotes

“The median guesstimate is for an increase of around 175k, which is above the three and six-month averages (147k and 172k respectively).  The unemployment rate may tick down to 4.8%.  Average hourly earnings need to increase by 0.2% to maintain the 2.6% year-over-year pace.

In the aftermath of the disappointing Q2 GDP estimate, we suspect the markets will have an asymmetrical response to US data.  The markets are more likely to respond to negative surprises than positive surprises.  For all practical purposes, no matter how strong the data surprises could be would sufficient to get the market to believe a hike in September is anything but an extremely small tail risk.  On the other hand, disappointing data could prompt more investors to give up on a hike at all this year.”