As I already flagged in early July and more recently, U.S. high frequency indicators confirmed that economic recovery has stalled since late June. More specifically, the employment market has showed signs of weakness. According to Bloomberg, last Wednesday, the Census Bureau’s weekly Household Pulse Survey showed that “The number of employed Americans declined by about 6.7 million from mid-June through mid-July, including a 4.1 million plunge from the first to the second week of July”.
— Christophe Barraud🛢 (@C_Barraud) July 23, 2020
— Reuters Business (@ReutersBiz) July 24, 2020
In addition, real-time labour estimates produced by academics at Arizona State University and Virginia Commonwealth University showed that the proportion who are employed fell again in July.
Source: Bick A. and Blandin A. (2020), Real-Time Labor Market Estimates During the 2020 Coronavirus Outbreak∗
Lastly, the Labor Department said last Thursday that initial jobless claims came in at 1.416 million for the week ending July 18 (above the consensus of 1.300 million). It was the 18th straight week in which initial claims totaled more than 1 million, and it snapped a 15-week streak of declines.
— Christophe Barraud🛢 (@C_Barraud) July 24, 2020
All in all, it seems that employment situation no longer improved and even deteriorated slightly in July compared to June, reflecting the halt of the reopening process in several states. Even if it’s a bit early to look at the consensus for July NFP, the first guess of +2.0M looks elevated (consensus was revised downward to +1.578Me on July 31).