The jobs report bucked the market's assumption
The jobs report bucked the market's assumption of a weakening economy, and sharply reduced prospects for a Fed rate cut at the July 30-31 FOMC meeting. Analysts saw a hefty 224k payroll rise after -11k in revisions, with strength in both goods and services employment, leaving a 0.2% rise in hours-worked despite a flat workweek figure at 34.4. Analysts saw a 0.2% hourly earnings rise that left the y/y climb at 3.1%, versus a 3.4% cycle-high in February. The household survey was as strong as the establishment survey. Analysts saw a 191k private payroll increase after revisions of -17k, and a 33k government job rise after revisions of +6k. Analysts saw a big 247k civilian jobs rise with a larger 335k labor force gain that allowed a jobless rate rise to 3.67% from 3.62% in May and a 3.59% cycle-low in April, The participation rate rose to 62.9% from 62.8% in the prior two months, versus a 5-year high of 63.2% in January and February. The market has discounted a pessimistic outlook that is at odds with ongoing reports of steady growth for jobs and consumption, with a firming pattern in the housing sector and trade data that have defied tariff headwinds.