The economy added 162,000 jobs in July, below expectations of 185,000. Other details of the report were disappointing with net downward revisions of 26K to the prior two months, a decline in the work week to 34.4 from 34.5 and decline in average hourly earnings of 0.1%. However, on the upside, the unemployment rate slipped to 7.4% (7.39%). This report was not a game changer for the Fed – we still believe the Fed will taper before year-end. But, it challenges the view of many market participants that an announcement in September is a “done deal”. The Fed reiterated the decision to taper is dependent on the data; we think December is marginally more likely, but we must continue to monitor the data.
Read the full report here.