Bank of America is bracing for a weaker-than-expected U.S. jobs report on Friday, projecting just a 60,000 increase in nonfarm payrolls for July — well below the 100,000 consensus estimate tracked by Dow Jones. In a note to clients on Tuesday, U.S. economist Aditya Bhave warned that while a softer headline figure may trigger an initial dovish reaction in markets, investors should focus more closely on the underlying components."The knee-jerk market response will probably be dovish," Bhave wrote, "but we encourage investors to pay more attention to private payroll growth and the unemployment rate." He flagged June’s jump in government hiring as likely the result of seasonal distortions, and expects a 25,000 drop in public-sector payrolls in the July data.Instead, Bhave sees the more telling trend in private-sector hiring, which he expects to rebound modestly to 85,000 in July, up from 74,000 the previous month. As for the unemployment rate, he sees a print of 4.2% — in line with consensus — but noted that even fractional moves could sway market sentiment. “A 4.1% rate or lower would likely be interpreted as hawkish, while 4.3% or higher would suggest growing labour market slack,” Bhave said. “Even the second decimal place might matter — a result near the upper end of the range could tilt the tone dovish.” This article was written by Eamonn Sheridan at investinglive.com.