Analyst Eric Merlis said June nonfarm payrolls were significantly below
expectations, a stark contrast with a string of upside surprises earlier this
year, but the labor market is still adding jobs and wage growth shows little
sign of accelerating. With participation falling and hiring cooling, the Fed’s
decision to stand pat last month looks less like a policy mistake and more like
prudent patience. Markets are repricing: as the inflation debate continues, the
probability of further rate hikes is declining.
