The United States can firmly consign its weather-beaten start to the year to history this week with data for vehicle sales and jobs in June expected to show a strong end to the second quarter.
Monthly jobs data, arguably the most important gauge for both the Federal Reserve and the American people, is expected to show that US firms are continuing to hire at a solid pace as a virtuous circle of economic activity and growth takes hold.
US employment already returned to its pre-recession peak in May, with non-farm job gains of 217,000. Economists polled by Reuters on average expect that to dip to 213,000 in June. That would be a fifth straight month of job gains above 200,000, a run unmatched since the September 1999-January 2000 period, just before the dot-com bubble burst. “If we settle at a 215-220 (thousand) pace that would be consistent with a transition to a faster pace of growth of around 3%,” said Lewis Alexander, US chief economist at Nomura.
Alexander said he recognised risks, including rising oil prices from the conflict in Iraq and Iraqi conflict and a possible messy end to China's housing boom. “An impact is possible, but I don't think all that likely. It would have to go very badly to materially impact the US outlook,” he said.
The jobs figures on Thursday, also set to feature a steady unemployment rate of 6.3%, will conclude a shortened week for the United States, which breaks for Independence Day on Friday.