On the July Jobs Report
A healthy beat with 209,000 net payrolls, tied for the third best month-on-month growth rate in a business cycle entering its ninth year. Strength appears to be coming from the small business sector, which has been energized by Trump’s election and deregulation agenda. The labor force grew by 349,000, raising the participation rate to 62.9%, which is consistent with the age demographics of the population. But much slack remains, both because at this level of participation, we are still 1.8 million payrolls from full employment, and that leaves out the effects of new all-time highs for educational attainment. Wage growth was better, but nothing to worry the Fed. Still no more hikes this year.