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Well, the report has been able to post increases in employment from March to May but that was mostly a result of government census hiring back then. As soon as the census was over, the NFP reading slumped back in the red and showed a 125,000 decrease in employment for June. For July, the report is expected to show a smaller decrease but there could be a slight chance of landing back in the green.

The ADP non-farm employment change report, which is usually considered a preview of the non-farm payrolls data, revealed that the private sector added 42,000 jobs last month. This was better than the projected 38,000 increase in hiring and more than twice as much as the 19,000 rise in private payrolls last June. That marks its sixth consecutive monthly increase, which means that Friday’s NFP could also bring good news for the labor market!

But you know what they say… Don’t judge a movie by its trailer. Let’s dig a little deeper and figure out how the US labor market is faring.

According to the last employment report, joblessness in the US fell to 9.5% in June from 9.7% in May.

Yahoo! Oh, wait…

Before you get all giddy about the 0.2% decline, you need to know that it wasn’t because firms went on a hiring frenzy. Nah-uh! The drop was mainly because a lot of Americans got discouraged looking for jobs and decided to exit the labor force instead. You see, the Bureau of Lying Statistics only counts those who are always on-the-go for job hunting but still couldn’t find any. The labor force got smaller by 842,000 in June and so there were lesser people to conduct the survey on. Pretty sneaky, eh?

The report also showed that the average workweek declined by 0.1% in June to 34.1 hours from 34.2 hours in May. That’s good right? Err, probably for those who snooze like bears in hibernation and are always late for work! But this was bad news for those who want to earn extra cash by doing more overtime shifts. The drop could mean that they had to work harder but still end up with a lower paycheck. How can they afford the new BlackBerry Torch now?

Also, while employment finally hit positive territory at the end of the first quarter, the pace is still very slow. It appears that hiring is moving sideways rather than upward, which will make it very difficult for new and discouraged workers from joining the labor force and finding jobs.

Still, every cloud has a silver lining, so don’t feel too down! Businesses have cut all the jobs that they could during the recession, which means that joblessness in the US has probably topped out. In other words, the labor market has already hit rock bottom and it really has nowhere to go but up! If the upcoming NFP report manages to beat expectations, we could see risk appetite pick up again and trample all over the dollar!