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Week ahead: July employment report

By Neil Irwin

It will be another packed week of economic data, which altogether should offer a sense of whether the pace of economic recovery stabilized in July or decelerated further.


The Institute for Supply Management releases its index of manufacturing business for July, which analysts expect to show a continuing slowdown in the pace of expansion. Forecasters project the index to come in at 54.5, down from 56.2 in June. That would reflect the fading impact of companies rebuilding their inventories; the manufacturing recovery is entering a more moderate phase after a strong first half of the year.

A report on June construction spending is expected to show activity has fallen 0.5 percent.


More economic data are released: Personal income is expected to have risen 0.2 percent in June, while consumption spending looks to have edged up 0.1 percent. Both numbers would be consistent with a continued sluggish recovery -- but were already reflected in the second-quarter gross domestic product data released Friday.

June factory orders, a forward-looking indicator, are expected to have risen 0.5 percent, and pending home sales are expected to have edged up in June after a near-collapse following the expiration of a homebuyer tax credit in May. July vehicle sales, meanwhile, are forecast to have edged up to an 11.4 million annual pace, from 11.1 million in June.


The Institute for Supply Management's index of activity at services businesses is, like its manufacturing counterpart, expected to have pulled back a notch to 53.3 in June, from 53.8.


The biggest economic news of the week will be the July employment report. After disappointing numbers in May and June, an acceleration of job growth would be a welcome sign. The overall job growth number is likely to be distorted by the elimination of temporary census jobs, so look to private payrolls for a read on the underlying health of the job market.

Forecasters expect that private employers will have added 110,000 jobs in July, an acceleration from the 83,000 private jobs added in June. They also expect the unemployment rate to edge up to 9.6 percent, from 9.5 p

By Neil Irwin  |  August 2, 2010; 6:18 AM ET
Categories:  *Morning briefing  
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