Week In Review

The labor market remains a strong point for the US economy as evidenced by the June jobs report. There were 147,000 jobs created last month, nearly 40,000 more than economists polled by the Wall Street Journal were expecting. The unemployment rate declined to 4.1% from 4.2%, which can be attributed to at least in some part by the labor force participation rate falling to the lowest level since December 2022. If you are looking for nits to pick, you might point out that of the 147,000 jobs created, only half were attributed to the private sector, meaning roughly 50% of the jobs created were state and local government positions. Federal government payrolls continued to see attrition for the fifth straight month. The June data is a positive reading on balance for the health of the economy, and one that Wall Street interpreted to mean the Fed won't be cutting rates in response to for a while longer. The CME Fed Watch tool shows the probability of a cut at the July 30 meeting at below 5%, down from nearly 20% last week.