CIBC Research discusses the reaction to today's NFP print for the month of June.
"Both hiring and labour force participation showed up healthy in June, but it was another somewhat soft wage print which at least initially caught the eye of markets. Non-farm payrolls advanced 213K, with an upward revision of 37K to the prior two months. The labour force participation rate also unexpectedly moved higher in June, which meant that despite the solid readings on employment, the unemployment rate ticked up to 4.0% from 3.8% in the prior month," CIBC notes.
"But, wages continue to be the focus of most investors, and today's numbers were a disappointment on that front. Average hourly earnings gained 0.2%, against expectations for a 0.3% increase. That meant the annual rate is still running at 2.7%, right in the middle of the relatively tight range it's been in for almost three years, and below the 3-4% the Fed would like to see.
As a result, fixed income has caught a slight bid, and the dollar has sold off. However, despite the disappointment on wages, today's employment readings are in line with our healthy growth estimate for the quarter," CIBC adds.