Nonfarm payrolls forecast increasing 225,000 in June
Unemployment rate seen falling to 3.6 from 3.7
Average hourly earnings forecast rising 0.3;up 4.2 yy

WASHINGTON, July 7 Reuters U.S. growth likely slowed in June after surging in the prior two months, but labor market conditions remain tight, with the unemployment rate expected to have retreated from a sevenmonth high and fairly strong wage gains persisting.

The Labor Department39;s closely watched employment report on Friday will be among factors leading the Federal Reserve to resume raising interest rates this month as signaled by the U.S. central bank and Chair Jerome Powell, after pausing in June.

The labor market has remained unbowed despite the Fed delivering 500 basis points worth of rate hikes since March 2022 when it embarked on its fastest monetary policy tightening campaign in more than 40 years. It is for now helping the economy to defy analysts39; predictions of a recession.

While the higher paying industries such as technology and finance are purging workers, sectors like leisure and hospitality as well local government and education are still catching up after losing employees and experiencing accelerated retirements during the COVID19 pandemic.

Monetary policy has been working in slowing employment growth since its peak about a year ago, said Sung Won Sohn, finance and economics professor at Loyola Marymount University in Los Angeles. However, that doesn39;t mean that we will see a recession,…