Rate Cuts Become a Little Less Likely as Job Growth Improves

Bond yields jumped in early trading as the June employment signaled much stronger job growth than economists has expected, reducing the possibility of a July 31st rate cut.

U.S. companies added +224k new jobs to their payrolls last month, well above the +160k median Bloomberg forecast and more importantly all but nullifying the surprisingly weak +75k (revised) showing in May. Nonfarm payrolls have been quite volatile this year, ranging from an eye-popping +312k advance in January to just +56k a month later, but are now averaging +172k for the first half of 2019. Although the pace of the last six months is below the +223k average for all of last year, it’s still quite respectable considering we’re now building on the longest economic expansion in U.S. history.

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