It may be July 4th week in the US, but we don't expect many fireworks on the economic data front. Of course, surprises could come from events in the Middle East, as Israel, Iran, and the Trump administration figure out whether the ceasefire will hold or missiles will start flying again. Surprises could also come from Trump's trade negotiations. A bunch of deals are expected in coming days.
On Capitol Hill, the Senate today passed a revised version of President Donald Trump's 940-page Big, Beautiful Bill, getting it closer to Trump's July 4 deadline. The question now is whether the House will embrace Senate alterations to the original House version of the legislation.
The markets will also pay close attention to a speech (Mon) by Federal Reserve Chair Jerome Powell. Speaking in Sintra, Portugal, Powell may drop a hint or two about whether last week's mixed data on trade, housing, and consumption might have altered his view that rate cuts aren't under serious consideration at Fed headquarters.
Fireworks or not, here's a brief look at this week's economic data highlights:
(1) Employment report. The release with the greatest chance of influencing the Fed's wait-and-see approach is the June jobs report (Thu). We're expecting hiring activity to remain reasonably brisk now that the fog of war is lifting in the Middle East and in US trade relationships. The jobless rate might tick up to 4.3% or even 4.4% given the modest upturn in initial unemployment claims (chart). We expect that a solid gain of 125,000-150,000 in payrolls should allay recession fears.
