(Bloomberg) -- U.S. index futures were little changed, after gauge of private payrolls and a drop in filings for jobless benefits indicated that the labor market continued to add jobs at a steady pace last month.
S&P 500 Index contracts expiring in September slipped 0.1 percent to 2,092 at 8:35 a.m. in New York, after the underlying index added 0.5 percent yesterday. Those on the Dow Jones Industrial Average dropped 19 points to 17,815.
“There is that balancing act for the Fed in that they are quite right to be vigilant and observant of the U.K.'s position, but at the same time the direct impact on the U.S. economy is probably going to be quite small,” said Daniel Murray, head of research at EFG Asset Management in London. “Markets are looking to nonfarm payrolls tomorrow as the first solid data point following the last Fed meeting to give guidance.”
Labor Department payrolls data are due on Friday, with estimates for a 180,000 increase in jobs last month from just 38,000 in May. A report today showed companies added 172,000 workers to private payrolls in June, according to the ADP Research Institute in Roseland, New Jersey. Meanwhile, another gauge showed filings for unemployment benefits unexpectedly declined last week to the lowest level since mid-April, signaling labor market stability amid a shaky global economy.
American equities rose Wednesday, erasing early losses after better-than-forecast data on services industries boosted optimism the nation can weather any fallout from the U.K.'s decision to leave the European Union. Separately, minutes from the Federal Reserve's June meeting showed policy makers are concerned about a hiring slowdown and are losing confidence in the economy's ability to withstand an interest-rate increase.
The S&P 500 has rebounded 5 percent since June 27, almost erasing a selloff that followed the Brexit vote. Last week, it rallied the most since November on optimism that central banks will loosen monetary policy to help counter the aftershocks from the U.K.'s referendum result.
Minutes from the Fed's June meeting released Wednesday showed that policy makers viewed the implications of the recent hiring data as “uncertain.” Most officials judged that they needed more information on employment, production and spending, and wanted to wait for the outcome of the U.K. referendum before any hikes.
Traders have pushed back bets for the next Fed interest-rate increase, pricing in a zero chance for higher borrowing costs this month. Just prior to the May employment report, the probability was about 55 percent. Odds for a move are now 41 percent or less until at least the end of 2017. Investors and policy makers will continue to scrutinize data to assess the vitality of growth as another earnings season approaches. Alcoa Inc. is unofficially launching the second-quarter reporting period next week.
To contact the reporter on this story: Aleksandra Gjorgievska in London at agjorgievska@bloomberg.net. To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net, John Shipman
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