July non-farm payrolls were a decent beat: July non-farm payrolls +209K vs +180K expected
- And not just the headline, the unemployment rate was 4.3% despite the tick higher in participation
- Average hourly earnings up, hours worked solid also
A few (in brief) comments from analysts:
Bill Gross:
- A rather strong report
- "I don't think it moves markets much"
- Despite job growth, its not stimulating economic growth
- Still needs core inflation back to 2% for Fed to raise rates this year (but winding back of QE to go ahead), Fed probably begins quantitative tightening but won't raise short-term rates this year
Deutsche Bank:
- There are so few caveats to taint a view that the report was solid
- Points again to markets significantly under-pricing Fed risks (most obviously for 2018)
- Will limit the downside for the USD
Barclays:
- Today's report doesn't change their assessment of labor-market conditions
- Expects moderate economic growth & gradual Federal Reserve normalization
- Expecting the solid employment results to continue
- Expects 3 to 3.5% wage growth by end of the cycle
- Expect to see higher inflation in next 3-4 months & if so a December rate hike