Goldman Sachs: The World Cup will add 40,000 nonfarm jobs.

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The World Cup may provide extra support for U.S. employment data in June. Goldman Sachs estimates that the event will increase non-farm payrolls by about 40,000, making Thursday's employment report stronger than market expectations.

According to CNBC's Thursday report, economists surveyed by Dow Jones expect non-farm payrolls in June to increase by 115,000, which is less than the 172,000 gain in May. Goldman Sachs is more optimistic, forecasting a total increase of 140,000 in non-farm employment.

Goldman Sachs bases its assessment on private data from small business payroll service company Homebase. The data shows that although overall hiring slowed in June, the host cities of the World Cup showed relatively more stable job performance, and hiring in hotel and leisure-related fields strengthened significantly.

For the market, the key issue is not whether the World Cup changes employment trends, but whether it might raise the headline figure for June. Investors will be watching whether the short-term job increases brought by the event might mask the true degree of cooling in the labor market.

The event boosts demand in specific cities and industries

Goldman Sachs believes the employment impact of the World Cup should mainly focus on leisure and hospitality, professional and business services, as well as trade and transportation industries. These sectors are more directly linked to consumption, flow of people, and service demand related to the event.

Homebase data supports Goldman Sachs' assessment. The report shows overall hiring in June continued to slow, but in the 11 World Cup host cities, employment was down year-on-year by 1.2%, compared to a 3.5% decline in other cities.

This difference shows that demand for labor in host cities may be boosted. Meanwhile, Homebase data shows hotel hiring grew by 9.5%, which Goldman Sachs sees as a likely source of the employment increase related to the World Cup.

Goldman Sachs calls this effect a "at least moderate" hiring boost. In other words, the World Cup has not reversed the overall hiring slowdown, but may be enough to alter the marginal performance of the June non-farm payroll report. Additionally, Goldman Sachs cautions that the June employment data itself may have an initially inflated value. The firm points out that in recent years, June's non-farm payroll preliminary values tend to be revised upward, but in the past four years, June's preliminary figures were ultimately revised downward.

Therefore, the main focus in interpreting the June employment report will be to distinguish between two types of signals: one is the short-term increase in hiring in event-related industries and cities, the other is the broader economic sector hiring momentum. Goldman Sachs forecasts that the World Cup may make the employment data appear stronger, but the overall hiring pace remains slower than in May.

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