Upcoming readouts of the US labor market are projected to show more moderate yet still healthy job growth, an historically low unemployment rate, cooler wage gains and fewer vacancies.

The jobs report will be front and center in a holiday-shortened week, with economists forecasting nonfarm payrolls increased by 225,000 in June. While still considered generally strong, it would be one of the smallest advances since the end of 2020.

Friday’s data are forecast to show the unemployment rate eased to 3.6%, while average hourly earnings grew 4.2% from June 2022 — the smallest annual advance in two years.

A slew of other labor-related indicators will come in the lead-up to Friday’s report, including the latest figures on job cut announcements, private payrolls from ADP, weekly unemployment claims, and May job openings.

What Bloomberg Economics Says:

“Wall Street analysts and economists are increasingly optimistic that the US economy is heading for a soft-landing scenario — a sentiment shared by Fed Chairman Jerome Powell in his comments during a June 28 panel discussion. We disagree. A key source of past resilience in the economy – households’ financial buffer – is fast disappearing. As a result, consumer delinquencies and small business bankruptcies are rising fast.”

—Anna Wong, Stuart Paul, Eliza Winger and Jonathan Church, economists. For full analysis, click here

The robust labor market has been a key source of fuel for the economy as the Federal Reserve kept tightening monetary policy to put a lid on inflation. As currently forecast, the June data would be consistent with recent reports showing a resilient economic expansion.

Read More: Surprisingly Strong Economic Data Keeps Recession Fears at Bay

The Institute of Supply Management will also release figures on manufacturing and services activity. Sandwiched between the two will be Wednesday’s release of minutes from the Fed’s June meeting, at which policymakers left interest rates unchanged. Investors will look for clues on when hiking may resume.

Read More: Powell Says Likely Need Two or More Hikes to Cool Inflation

Looking north, Canadian job numbers for June will offer a final look at how the economy there is faring ahead of the central bank’s rate decision the following week. Statisticians will also release consumption, savings and wealth data for different household income levels for the first quarter of 2023.

Elsewhere, a possible rate hike in Australia, a measure of China’s economic health, and inflation reports from Switzerland to Turkey to Brazil will keep investors busy.

Click here for what happened in the past week, and below is our wrap of what’s coming up in the global economy.

Asia

China’s Caixin PMI reading on Monday will offer an unofficial snapshot of how the factory sector in the world’s second-largest economy is faring amid concern Beijing is running out of stimulus tools to support growth.

PMIs from around Asia on Tuesday will show how the wider region is faring.

The Reserve Bank of Australia also meets that day, with another rate hike likely, although opinion is split following weaker-than-expected monthly inflation figures for May.

Malaysia’s central bank is seen holding rates steady on Thursday, with Sri Lanka’s policy decision also due out that day.

The Bank of Japan’s Tankan report at the start of the week will show the latest on corporate sentiment, while wages at the end of the week will give further pointers for the BOJ to mull as it heads toward its next policy meeting at the end of the month.

Inflation readings are largely expected to show a further slowdown in Indonesia, South Korea and Thailand.

The Philippines also releases inflation data in the first week of new central bank Governor Eli Remolona’s six-year term.

• For more, read Bloomberg Economics’ full Week Ahead for Asia

Europe, Middle East, Africa

Germany, Europe’s biggest economy, will be in the spotlight as reports show how the industrial machine that motors it fared in May.

Exports on Tuesday, factory orders on Thursday and industrial production on Friday may illustrate the extent to which a recession earlier this year still overhangs growth prospects.

With German inflation having re-accelerated in June, helping to drive an underlying measure higher in the wider euro region, European Central Bank officials are moving toward a rate increase in July that could well be followed up with further action.

Appearances by policymakers, including Vice President Luis de Guindos and Bank of France Governor Francois Villeroy de Galhau, may offer clues on the monetary outlook.

Elsewhere, Swiss data on Monday will reveal if inflation there slowed below the 2% ceiling targeted by the central bank.

A quiet week in the UK features little on the calendar other than an appearance by Bank of England official Catherine Mann on Friday.

Data in the Nordic region, where monetary tightening is still in full swing, will draw scrutiny, including monthly gross domestic product on Friday in both Sweden and Norway.

Turning east, Romania’s central bank is expected on Wednesday to keep its rate unchanged for a fourth meeting. Officials are waiting for inflation to ease convincingly before embarking on loosening.

In Poland the following day, monetary officials are also anticipated to keep borrowing costs unchanged. Governor Adam Glapinski, with a new set of staff projections in hand, may be more forthcoming with a guidance on possible rates cuts.

For Turkey, where inflation was close to 40% in May, data on Wednesday might show slowing price growth. The report will be closely watched after tightening finally resumed there following its election in May.

And after six successive rate hikes of a combined 475 basis points, a sharp appreciation in Sierra Leone’s currency against the dollar in June may help to slow runaway inflation, giving the central bank room to keep borrowing costs unchanged on Monday.

• For more, read Bloomberg Economics’ full Week Ahead for EMEA

Latin America

Inflation forecasts in the Brazilian central bank’s Focus survey of economists may edge lower for a seventh week, following the National Monetary Council’s decision to set the inflation target at 3% for the coming years.

Forecasts for June monthly inflation tumbled from 0.52% in early May to -0.09% in the June 23 survey — implying a 3.15% annual print, 10 basis points below target.

Colombia’s central bank on Thursday posts the minutes of Friday’s meeting, at which policymakers ended a record hiking campaign to leave the key rate at 13.25%. Analysts surveyed by Bloomberg expect easing to start in the fourth quarter.

With Chile’s central bank poised to begin unwinding its longest and sharpest hiking cycle, the minutes of its June meeting aren’t likely to serve up surprises. The June inflation report is expected to show prices slowed for a ninth month in 10.

In Mexico, the June consumer price report should back Banxico’s June 22 decision to end a record hiking cycle: economists see the headline and core prints coming in below the central bank’s forecasts.

Look for the minutes of Banxico’s June meeting to find policymakers reiterating the need “to keep the interest rate at its current level for a prolonged period,” while providing little if any guidance on the potential timing of any easing.

• For more, read Bloomberg Economics’ full Week Ahead for Latin America

--With assistance from Robert Jameson, Patrick Donahue, Laura Dhillon Kane, Paul Jackson and Monique Vanek.

Author: Molly Smith, Vince Golle and Craig Stirling