The headlines scream “850,000 jobs added.” The Federal Reserve Open Market Committee (FOMC) members are probably saying “Oh no! We might have to raise rates and cut asset purchases!!!”
Despite the 850,000 jobs added in June, there are so not so great aspects to the jobs report. Like Labor Force Participation remains the same in June as it was in May … and remains considerably lower than pre-Covid crash figures.
The unemployment rate actually increased to 5.9% in June. Average hourly earnings MoM fell while YoY it rose.
The UNDERemployment rate fell to 9.8%. But that is only back to mid-Obama levels and considerably below pre-Covid levels.
More than half of all job gains were bartenders and teachers.
On the interest rate and Fed taper front, (Dow Jones) — Good day. Count Federal Reserve Bank of Philadelphia President Patrick Harker among the Fed officials who think it would be a good idea for the U.S. central bank to start paring its $120 billion a month in bond buying stimulus. “I would like to see tapering begin,” he told The Wall Street Journal in an interview. “I’d like to see it happen sooner rather than later.” Meanwhile, Sen. Patrick Toomey (R., Pa.) says the Atlanta, Boston, Minneapolis and San Francisco Fed banks are ignoring his requests for information about their work on racial economic justice and climate issues, in a dispute highlighting the limits of congressional oversight over the regional institutions.
So what will the FOMC do with these good news / bad news labor reports?