CIBC Research discusses its reactions to today's US jobs report for the month of July.
"The Fed cut rates without much evidence that the US economy was in serious trouble, and that's still the case after looking at July's payrolls figures.
The 164K payrolls gain, coupled with a downward revision to the prior two months (totaling -41K) still have the trend running a bit stronger than would typically be needed to sustain a given jobless rate. Unemployment held at a scant 3.7%, and wages rose 0.3% to put the 12-month rate back up a tick to 3.2%, in the range we've seen of late. The only fly in the ointment was a one tick drop in average weekly hours, and it was a soft trend in the average workweek that was also our only concern with the labor market in Q2. The 3-month annualized pace for total hours is sitting at a moderate 0.7%, which would be consistent with real GDP growth a bit below 2% assuming a 1% pace to productivity," CIBC notes.
"Still, the data are consistent with our call for just one more Fed cut, given that the US actually needs to see growth no higher than 2% to avoid overheating the labor market," CIBC adds.