Nonfarm payrolls forecast increasing 200,000 in July
Unemployment rate seen unchanged at 3.6
Hourly earnings forecast rising 0.3; up 4.2 yearonyear

WASHINGTON, Aug 4 Reuters U.S. job growth likely slowed further in July, but retained enough momentum to shield the economy from a recession as hefty interest rate increases from the Federal Reserve cooled demand.

The Labor Department39;s closely watched employment report on Friday is still expected to show a tight labor market, with the unemployment rate steady near multidecade lows, though wage growth probably moderated. It would follow on the heels of data last month showing consumer spending resilient and the increase in annual inflation slowing sharply in June.

Economists who have long been forecasting a downturn by the fourth quarter of this year are increasingly becoming convinced that the softlanding scenario for the economy envisaged by the Fed is now possible.

There are signs that labor demand is decelerating, but it39;s not like it39;s fallen off a cliff, said Sam Bullard, a senior economist at Wells Fargo in Charlotte, North Carolina.

Certainly, if we get another payrolls number in the 200,000 region, that would add to evidence that the Fed can engineer a soft landing.

Nonfarm payrolls likely increased by 200,000 jobs last month, after rising 209,000 in June, according to a Reuters survey of 80 economists. That would be the smallest gain since December 2020. Still, employment growth would be double the…