People gather at the entrance for the New York State Department of Labor offices in Brooklyn on March 20, 2020. The Federal Reserve estimates that 47 million people could lose their jobs before the COVID-19 crisis ends.
Andrew Kelly | REUTERS
Futures tied to major U.S. equity averages held steady in overnight trading on Thursday as investors awaited a key monthly jobs report.
It’s widely expected that the labor market’s rebound has slowed down amid a spike in coronavirus cases across the U.S. Economists predicted that the economy gained 1.48 million jobs in July, down sharply from the 4.8 million in June, according to Dow Jones. The jobless rate is expected to dip to 10.6% in July from 11.1%.
The jobs report is due at 8:30 a.m ET Friday.
“Tomorrow’s employment report should provide a little more clarity on whether or not businesses are starting to hire again or if there is continued trepidation due to Covid,” said Brian Price, head of investment management at Commonwealth Financial Network. “If the number surprises on the downside and the unemployment rate doesn’t dip below 11% then we could see a market pullback on the news.”
The jobs data will come as lawmakers and the White House struggle to agree on a new stimulus package after a $600 per week enhanced federal unemployment benefit expired at the end of July.
The Trump administration has threatened to pull out of talks and try to address jobless benefits and the eviction moratorium by executive action if the sides fail to reach an agreement by Friday.
The stock market is coming off five consecutive days of gains as the technology sector built on its momentum. This week’s gains in the S&P 500 pushed the equity benchmark just 1.3% below its Feb. 19 record. The Nasdaq Composite also closed above 11,000 for the first time ever on Thursday.
“These big round numbers are a nice reminder of just how strong this rally has been since the March lows,” said Ryan Detrick, chief investment strategist for LPL Financial. “When you look at how strong earnings and guidance have been from the group, you realize there’s a reason the Nasdaq is at 11,000 and why eventual continued strength is quite likely.”
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