According to ChainCatcher, institutional forecasting models show that the pace of expansion of the U.S. labor market may slow, which may hint at an overall cooling trend. But if today's non-farm payrolls report is better than expected, concerns about a hard landing may subside, and the sudden risk aversion in the market will ease. The forecasting model shows that the number of non-farm payrolls in the United States will increase modestly to 231,000 in July from 206,000 in June, higher than the general expectation of 175,000. The unemployment rate is expected to remain unchanged at 4.1%. The Federal Reserve is expected to start cutting interest rates in the coming months, and the possibility of a sharp rate cut this year is increasing.
Still, the U.S. economy has shown signs of slowing but not significantly interrupting. If that continues, the stock market sell-off could be overdone, while bets that the Federal Reserve will slash interest rates could ease a bit.
