Fra Commerzbank
The employment report and the ISM indices will probably show next week that the US economy had a good start into Q3. This would tip the scales further towards an imminent Fed rate hike. In Germany, order intake presumably only rose in June because there were numerous aircraft orders.
According to Fed officials, incoming data will decide whether and when the Fed will raise interest rates. We forecast encouraging US indicators for next week, which should underpin our forecast of a rate hike in September. Weekly jobless claims give reason to expect that in July payrolls increased even somewhat more sharply than on average in the last few months (around 200k). We are reckoning with 230k additional jobs (consensus: 210k).
Unemployment would thus also continue trending downwards. Despite this, the unemployment rate will probably come in flat at 5.3% in July (consensus: 5.3%), as the marked decline by two-tenths in June was above all the consequence of a much lower labour force number. In July, a countermovement has probably seen many individuals returning to the labour market, which per se would raise the number of (counted) unemployed.
Average hourly wages should be more of a focus for the Fed anyway. They came in flat in June, sowing new doubts about whether the labour market is really approaching full employment and inflation risks are rising. We think the weak figure in June was an outlier, as other (and more reliable) data on wage growth such as the employment cost index (ECI) paints a different picture. Accordingly, average wages in July should have increased in compensation at a rate of +0.3%, more sharply than usual (consensus: 0.2%). We also expect to get good news for the Fed from the ISM purchasing managers’ indices for July.
Regional sentiment indicators lead us to expect an increase in the services index to 57.5 from the already fairly high level of 56.0 (consensus: 56.2). The manufacturing sector, which is more dependent on the global economy, is lagging behind slightly (chart 10), because the USA’s most important export markets are growing more slowly in 2015 compared to last year and the strong dollar is hampering exports. But here, too, we forecast a slight gain for the ISM index to 53.8 from 53.5 (consensus: 53.5).
