A Weaker June Labor Market Report Unlikely To Change The Hawkish Fed

June labor market data is expected to show slight weakening, but not enough to change the Fed’s current hawkish stance. A PMI leading indicator suggests more severe labor market deterioration in Fall, especially in manufacturing. Overall, the data is a mild negative for growth expectations while reinforcing the path of restrictive policy and higher-for-longer rate expectations.

Analysis

June labor market data is expected to show slight weakening, but not enough to change the Fed’s current hawkish stance. A PMI leading indicator suggests more severe labor market deterioration in Fall, especially in manufacturing. Overall, the data is a mild negative for growth expectations while reinforcing the path of restrictive policy and higher-for-longer rate expectations.