The 224,000 gain in non-farm payrolls in June was much stronger than the consensus estimate of 160,000 and would seem to make a mockery of market expectations that the Fed will cut interest rates by up to 50bp late this month. Employment growth is still trending gradually lower but, with the stock market setting new records and trade talks with China back on (for now at least), the data support our view that Fed officials are marginally more likely to wait until September before loosening policy.
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