The US economy continues to produce jobs at a decent clip, 213k for June, better than the 195k expected. Digging a bit deeper into the data, the unemployment rate actually jumped to 4% from 3.8%, while hourly earnings data missed estimates and stayed at 2.7%. The jump in the unemployment rate, at this stage, is not too alarming, and actually helps to explain why wages haven’t been surging.
This report is generally risk-friendly, as it suggests that the US economy remains in its sweet spot: employers are hiring, however, wages aren’t rising fast enough to trigger sharper than expected rate rises from the Federal Reserve. Hence why S&P 500 Futures prices have moved into positive territory in the immediate aftermath of the report.
The dollar has also picked up from its lows, but is still looking shaky as FX traders shun the buck in favour of the euro at the end of this week.
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