Wall Street Stunned As June Payrolls Unexpectedly Smash Expectations
With even permabull economists conceding that the US economy is slowing rapidly and today’s payrolls report will show a big decline, moments ago the BLS confirmed yet again that the monthly payrolls number is nothing but a politically mandated homework assignment, when – at a time when US GDP is set to decline for two quarters in a row – it reported that in June US payrolls rose by 372K, smashing expectations of 268K, coming well above the whisper number of 245K, and trouncing Goldman’s preferred payrolls range of 175-250K.
Today’s number was not only the 3rd consecutive beat to expectations, but the biggest beat going back to February.
As a reminder, this is what Goldman said coming into today’s report: “the market wants not too hot not too cold to keep this bid. Strong enough to say the world isn’t going into recession. Not too strong to send US10s back to 3.25% on the day. Not too cold to highlight US data deteriorating while inflation will stay high and fed hiking 75bps into dramatic slowdown. Something like 175k to 250k.”
While this was still the lowest number back to April 2021 (even after May was revised lower from 390K to 384K), the pace of slowing is nowhere near enough for the Fed to be satisfied that the economy is cooling fast enough, which means an economy-crushing 75bps rate hike in July squarely in the Fed’s sights.
Fri, 07/08/2022 – 08:37