How to interpret the "small non-farm" data released on July 3?
Small non-farm is the US ADP employment data. Last night's data report showed that the number of new jobs in the US private sector in June was 150,000. This figure is lower than the market expectation of 165,000 and is the smallest increase since February. This shows that the growth momentum of the labor market is slowing down in a high interest rate environment. From the data, it is good for the capital market, so the Nasdaq has reached a new high again.
In addition, the number of initial unemployment claims in the week was 238,000, higher than the expected value of 235,000 and higher than the previous value of 233,000. The increase in the number of initial unemployment claims may indicate some signs of weakness in the labor market as more people are looking for jobs. However, this number is still relatively low, compared with the 20 years before the epidemic, the average number of initial unemployment claims per week was about 345,000. This shows that despite the recent increase, the number of unemployment claims has remained low overall.
The above data shows that the US labor market has shown a certain resilience in an environment of high prices and high interest rates. By then, the labor market is slowing down, and the number of unemployment claims will continue to increase. The expectation of the Fed's interest rate cut will accelerate. There will be a big non-farm data release on Friday. At that time, market fluctuations will be the rhythm of choosing directions and ups and downs.
