Employment Situation
Today’s big economic news was the release of May’s governmental Employment report at 8:30 AM ET. It revealed the employment sector was stronger than thought with a surprisingly high 172,000 new job number, greatly exceeding the 85,000 or so that was expected. Furthermore, upward revisions to April and March of 64,000 and 29,000 respectively adds 93,000 more jobs year to date than previously thought. It is worth noting that this was the fourth month of over 100,000 jobs added during the past five months. These numbers make it hard to say the employment sector is stumbling, which in itself is bad news for bonds and mortgage rates. However, they also undermine the theory that the Fed needs to lower key short-term interest rates to support employment. In other words, reports like this make it more likely that we will get a Fed rate increase to help bring inflation down before we see another rate cut.