It appears that the Fed can take the summer off, with job creation in June exceeding expectations.
The numbers.
- 147k jobs were created, beating expectations of 106k.
- The prior two months were revised up by 16k.
- The mix was a touch weak, with state and local government hiring accounting for over half of the new jobs.
- YoY hourly earnings came in at 3.7% (3.8% expected)
- Unemployment rate drops from 4.2% to 4.1% defying fears that it would climb to 4.3%
The implications.
Traders have reduced the odds of a July cut to virtually zero, as the Fed can afford to be more patient. As a result, US yields have surged 7- 10 bps higher.
