Payrolls posted an impressive rebound, rising +287K in June. Over the past three months, payroll gains have averaged +147K/month. While down from the +200K pace in 2015, a +150K trend is clearly healthy and appears sustainable.
AbstractThe June rebound in payroll jobs exceeded even FMI’s upbeat expectations. While today’s report should have erased any (irrational) fears stemming from the weak May jobs report, there is still virtually no chance that the FOMC will hike rates at their meeting later this month. Among other issues, this data is “Pre-Brexit,” so policymakers will need further reassurance/time to overcome their (also irrational) worries about a European/global meltdown. FMI still expects the FOMC to resume hiking rates by year-end. The chances for action in September are now noticeably greater though Yellen will likely look for further encouragement, e.g., rising inflation/expectations.