This week won’t feel quite as crowded as last, but the data docket is nevertheless formidable and features all the usual first-of-the-month, top-tier releases from the US, with NFP headlining.

Markets expect to hear the US economy added 200,000 jobs in July, continuing a long-running streak of solid gains and underscoring the “resilient labor market” narrative for the nth time.

During remarks to reporters following the July FOMC meeting, Jerome Powell was clear: The Fed’s pleased with the economy’s outperformance. Still, he cautioned, a hotter economy does increase the odds of higher inflation and a monetary policy response “at the margin.” That’s the so-called “right-tail” risk — another re-acceleration, spurred on, perhaps, by the wealth effect from this year’s monumental rally on Wall Street and the resumption of home price gains.

It’s worth noting that June’s report, although solid, came with revisions which lopped 110,000 from the prior two months’ headlines. It’s possible the labor market is cooling around the edges — “at the margin,” if you like.

The unemployment rate is expected to remain at 3.6%, which might as well be a record low. Asked last week how much unemployment the Fed is willing to trade to “get that last mile” towards 2% inflation, Powell was noncommittal. “It’s not that we’re aiming to raise unemployment,” he said. He needn’t worry. If they are trying, it isn’t working.

As usual, the average hourly earnings print will garner plenty of attention in the context of the wage-price spiral discussion, and particularly in light of high-profile labor negotiations. However, the cooler-than-expected ECI report for Q2 takes some of the pressure off the AHE reading — if it’s hot, the Goldilocks crowd can point to ECI as a better indicator, but if it’s cool, bulls can call it icing on the cake. AHE overshot in June. A downward revision would be nice.

Although Powell is a believer in the “immaculate disinflation” narrative (or pretends to be, anyway) he insisted last week that both the Fed and the public should be “honest about the historical record,” which suggests some labor market softening is unavoidable on the path to sustainable disinflation. An update on job openings, due Tuesday, will serve as a progress report on the extent to which there’s still room for the Fed to outsource wage disinflation to the JOLTS headline, thereby avoiding an increase in joblessness.

Consensus expects 9.62 million from the JOLTS headline. That’d represent a decline of ~200,000 from the prior report, but revisions will change the math.

The overarching point is that the Fed needs the ratio shown above to fall further, and for quits to decline such that the labor churn helping to keep wage growth elevated abates.

ADP’s report on private sector hiring will be eyed closely on Wednesday. Recall that June’s blockbuster ADP print moved markets. Challenger job cuts are due Thursday.

The pace of US job cuts moderated sharply in June, when employers announced just 40,709 cuts, down by half from May. Still, 2023 is on pace to see the most job cuts outside of COVID and the financial crisis.

Also on deck in the US: The SLOOS, which’ll be watched for any evidence of incremental credit tightening (i.e., the lagged impact of March’s banking sector drama), Q2 unit labor costs and productivity (a sleeper report that does have meaningful implications for the macro and policy), ISM manufacturing and services, as well as Treasury’s quarterly refunding announcement.

Elsewhere, the BoE is up to bat, with markets split on whether the bank will opt for 25bps or 50bps. Traders will also get inflation and GDP figures for the eurozone, where the French economy is holding up even as Germany remains mired in a protracted period of stagflation. PMIs out of China will likely suggest the world’s second largest economy still needs stimulus.