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Three months after "Be Still My Heart," employment growth continues robust for an economy so close to full employment, especially considering the weakness in the housing sector. Payroll employment rose 132,000 in June and, as is usual lately, earlier monthly gains were revised upward. April employment growth was revised up from 80,000 to 122,000, and May was revised up from 157,000 to 190,000, a combined upward revision of 75,000 jobs.
As measured by the separate household survey, employment increased by an even larger 197,000 jobs in June, which was sufficient to keep the unemployment rate flat at a low 4.5 percent. The unemployment rate has been at 4.5 percent for several months.
Earnings increased 0.3 percent in June and 3.9 percent for the year ending in June. The average workweek increased 0.1 hours to 33.9 hours. All in all, an excellent jobs report.
So, how did financial markets react to the good news? Initially, they responded negatively by pushing bond yields up and equity prices down. They continue to show a preference for good medicine (from the Fed) over good health. Go figure.
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