Announced this morning, the economy added 209,000 jobs in June, less than expected and the previous month was revised lower. The Health Care and Social Assistance industry and Government jobs were again relatively strong, while Retail Trade and Temporary Help were relatively weak. The Unemployment Rate decreased one-tenth to 3.6% and the Labor Force Participation Rate at 62.6% is the same as the previous month. Average Hourly Earnings increased 0.4% in June, higher than expected, and is 4.4% higher on an annual basis. In addition, Average Weekly Hours were 34.4, slightly higher than the previous month.
Overall, another increase in the headline jobs number, but it was less than expected and the previous month was revised lower, hinting a bit of weakness from previous levels. The unemployment rate ticks lower indicating individuals are still able to find jobs. However, wages were ahead of estimates and are still increasing which may cause inflation to remain sticky. Considering the dynamic of a lower unemployment rate and higher wages, the Federal Reserve is likely to keep monetary policy tight, as some officials have discussed possible rate increases at upcoming meetings. How long it takes for tighter monetary policy to further impact the labor market, consumer spending, and overall liquidity will be key factors for the market as we head into the next round of earnings reports in the coming weeks.
Following the release of the jobs report, the yield on the U.S. 10-year treasury is just slightly lower, rebounding from an initial drop as the data was released, and equity futures are lower as we head into the market open.
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