Treasury prices are unchanged to slightly higher following the release of the June jobs report (and a relatively quiet overnight session). European equities and U.S. futures have traded flat so far this morning, and major Asian markets were up roughly 1% on the day. As expected, $34 billion of U.S. tariffs on Chinese imports went into effect overnight, and China responded in kind with the same amount of retaliatory tariffs (includes soybeans and autos).
Nonfarm payrolls added 213,000 jobs in June (195k expected), and the prior two months were revised higher by a total of 37,000 jobs. Average hourly earnings were up 0.2% m/m and 2.7% y/y in June, both of which were below expectations. In the household survey, the headline unemployment rate rose 20 bps to 4% (29 bps increase if rounding to 3 decimals), but it was largely attributable to an increase in labor force participation. A 102,000 increase in household employment was outpaced by a 601,000 increase in the official labor pool, which pushed the participation rate up 20 bps to 62.9%. The U-6 underemployment rate also bounced higher by 20 bps to 7.8%. Overall, it was a solid report from a job growth perspective; the wage growth was just a little underwhelming for the markets, which explains the modest rally in Treasuries at the moment.
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