[Saracen Outlook] US NFP – Strong US Jobs & Services Sector Data

<p>&nbsp;Yesterday's US service sector data report showed the sector continued to benefit from strong job demand, prompting many businesses to increase hiring.</p><p><br /></p><p>This is a trend that has not been seen in the past few months even though the increase in US service sector data has been modest.</p><p><br /></p><p>According to the latest data, surely the policy makers (FED) will carefully observe the fundamental strength of the labor market. The employment component of the Institute for Supply Management's (ISM) services index rose to 53.1 in June, reflecting the fastest rate of job recruitment in four months.</p><p><br /></p><p>In a broader context, yesterday's labor market data showed a gradual easing in the recruitment trend.</p><p><br /></p><p>Although the ISM hiring index in the manufacturing sector showed a contraction last month, there were other indicators that showed strong hiring activity in the same period, such as the ADP jobs data report and the announcement of job cuts by Challenger.</p><p><br /></p><p><br /></p><p>Additionally, the increase in the number of workers who quit their jobs in May indicates a significant level of confidence in the labor market outlook.</p><p><br /></p><p>This string of stronger-than-expected data has prompted us to adjust our estimate for June's NFP jobs data to 260,000, compared to the previous consensus expectation of above 245,000 to be announced tonight.</p><p><br /></p><p>This shows positive signs for the service sector and shows the need to continue to strengthen the economy by meeting the high demand for manpower.</p>