U.S. payrolls to rise by 170,000 in July - ING

James Knightley, ING's chief international economist in London, suggests that after June’s incredibly strong jobs growth of 224,000, which was above every one of the 75 forecasts in Bloomberg's survey of analysts, there is obviously the risk of a softer outcome for July. 

• "We are looking for 170,000, which would be broadly in line with the six-month moving average. This also tallies with evidence from the latest Federal Reserve Beige Book, which based on data up to July 8 reported that “employment grew at a modest pace, slightly slower than the previous reporting period."
• Given the early (2nd August) release date we, unfortunately, haven’t got much up to date information specifically for July, but certainly the recently released regional manufacturing surveys offer encouragement that firms are still expanding and need workers. The consensus range of expectations for July payrolls growth is pretty broad from a low of 74,000 up to 224,000.
• Nonetheless, we think there may be a little upside risk to the consensus estimate for wages given the demand-supply imbalance in the jobs market. We expect wage growth of 0.3%MoM, 3.2%YoY versus the market forecast of 0.2%/3.1%.
• After 3.6% readings in both April and May, the unemployment rate ticked higher to 3.7% in June. We expect to see a return to 3.6% for July, which would also be the lowest reading since December 1969. 
• The participation rate tends to be quite a choppy series, so if we do see that move higher once again it would make a 3.7% unemployment rate look more likely. A higher unemployment rate, for this reason, would certainly not be a signal we should be concerned."