To The Moon

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The U.S. labor market continues to send mixed signals, as contrasting data emerged in the June jobs report, which are still likely to keep the Federal Reserve fully focused on the war against inflation.

In June, nonfarm payrolls (NFPs) rose by 209,000, according to the Bureau of Labor Statistics data, significantly missing economists’ expectations of 225,000. This figure represents a sharp decline from the revised lower 306,000 increase seen in May, signaling that the employment momentum softened last month.

This lower-than-expected reading comes on the heels of an impressive ADP National Employment Report, which showed an astounding 497,000 job gains in June.

The unemployment rate also ticked down as anticipated, from 3.7% to 3.6% in June, underscoring the continuation of historically low levels. Average hourly wages increased by 0.4% month-over-month, higher than expectations of, while annual wage growth came in at 4.4%, topping estimates of 4.2%.

NFPs Growth Declined In June

The June jobs report showed signs that the U.S. labor market may be losing steam after surprisingly strong growth earlier this year, but some categories still saw big jumps in employment last month.

The biggest area for growth was health care and social assistance, with 65,200 jobs added, according to data from the Labor Department. That category expanded by more than 70,000 new positions when education is included, as some economists do.

Robust jobs data in June

The strength in those categories is a reason why more than half of the jobs added in June went to women, Betsey Stevenson, a University of Michigan professor and former Labor Department chief economist, said Friday on CNBC’s “Squawk Box.”

“It tells us about where the jobs are coming from. They’re coming from the kinds of industries that women tend to work in, like health care, education services and government,” Stevenson said.

Trade #1

Trade #2

Following Friday’s big data release, traders kept their bets on a resumption in hiking later this month, pricing in a 92% chance of a quarter-point hike on July 26.

Traders adjusted their forecasts by decreasing the likelihood of a second rate increase in September (following the July hike) from 27% to 22%, as reflected in market-implied probabilities.

Weekly option trades summary 

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