From our colleagues at our sister company, Argent Trust:
In this morning’s data, the economy added 372,000 jobs in June, higher than expected. The Education and Health Services industry was strong, while jobs in Government were weak. The Unemployment Rate held steady at 3.6% and the Labor Force Participation Rate at 62.2% is lower than the previous month. Average Hourly Earnings increased 5.1% on an annual basis, higher than expected but lower than the revised figure from the previous month, and Average Weekly Hours were 34.5 which held steady from last month’s revised figure.
Overall, a strong payrolls report with the headline jobs number positive and well ahead of expectations and an unemployment rate that remains low. Although, the participation rate ticked lower indicating that there were fewer people looking for work. While average hourly earnings was slightly above expectations, it was still less than the previous month and remains above its long-term average of 4%, highlighting the difficulty businesses still have in hiring and retaining workers. With economic data points waning in recent weeks, including consumer confidence, retail sales, and ISM measures, discussions of a recession are ongoing, but the labor market remains tight and exhibits resilience against a downturn. However, the Federal Reserve appears resolute in tightening policy to fight inflation, which could push the scales against the economy in the months ahead. As company earnings reports are upcoming, their results, adjustments to their future guidance, and the direction of changes in analyst estimates for revenue and earnings will be key for the markets in the weeks ahead.
In all, U.S. 10-year treasury yield ticks higher following the payrolls report and equity futures are lower as we head into the market open.
This material is intended to be for informational purposes only and is intended for current or prospective clients of Argent Trust Company. This information is obtained from sources believed to be reliable, and its accuracy and completeness are not guaranteed. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice, and does not take into account all the circumstances of each investor. Forward-looking assumptions are Argent Trust Company’s current estimates or expectations of future events or future results based on proprietary research and should not be construed as an estimate or promise of results that a portfolio may achieve. Actual results could differ materially from the results indicated by this information. Investments can go down as well as up. Past performance is not a reliable indicator of future results.