US: Unemployment rate to edge back down to 3.5% for June – Societe Generale

Analysts at Societe Generale offer a sneak peek at what to expect from Friday’s US labor market report due for release at 1230 GMT.

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Key quotes

“Employment gains are slowing, and we view this as inevitable as more of the unemployed have found jobs and the unemployment rate has dropped well below 4%.”

“Strong employment, however, is how we interpret an increase of nearly 300K jobs in a month.”

“Trucking, delivery, food services and healthcare remain areas of recovery and growth for job markets.”

“We expect the unemployment rate to edge back down to 3.5% for June, possibly very soon.”

“A rising labor force participation rate (more people entering the labor force) is one pro-growth factor that can steady the unemployment rate, preventing a decline, even when the economy is strong. Later, as businesses reduce their demand for labor, smaller job gains are why the unemployment rate stabilizes or begins to rise.”