Treasury prices were modestly higher ahead of the July jobs report and are little changed immediately following the release of the numbers. Overnight, China announced that it plans to counter any new tariffs from the United States with $60 billion of new tariffs on U.S. imports. Additionally, the Chinese central bank is reinstating 20% reserve requirements on currency trading after the U.S. dollar hit a 10-year high versus the yuan in offshore trading. The move suggests Chinese officials are concerned with the tenacity of the recent yuan depreciation, particularly the risk of capital flight from the country if volatility increases further.

Nonfarm payrolls added 157,000 jobs in July, 37,000 less than expected, but at the same time, the prior two months were revised higher by a total of 59,000 jobs. The establishment survey also showed average hourly earnings rising 0.3% m/m in July (as expected), and the year-over-year rate remained at 2.7%. In the household survey, the headline unemployment rate fell to 3.9% (18 bps decline if rounded to three decimals). A 389,000 increase in household employment outpaced a 105,000 increase in the official labor pool, and the labor participation rate remained unchanged at 62.9%. Overall, this was another solid jobs report. Weaker than expected job growth was offset by decent wage growth and the near-20 bps decline in the headline unemployment rate. Also, the U-6 underemployment rate fell 30 bps to a new 17-year low of 7.5%.

Jason Haley
Managing Director, Investment Management Group


07/30Pending Home Sales MoM0.10%0.90%-0.50%
07/30Pending Home Sales NSA YoY-4.00%-2.80%
07/30Dallas Fed Manf. Activity3132.336.5
07/31Personal Income0.40%0.40%0.40%
07/31Personal Spending0.40%0.40%0.20%0.50%
07/31Real Personal Spending0.40%0.30%0.00%0.30%
07/31PCE Deflator MoM0.10%0.10%0.20%
07/31PCE Deflator YoY2.30%2.20%2.30%2.20%
07/31PCE Core MoM0.10%0.10%0.20%
07/31PCE Core YoY2.00%1.90%2.00%1.90%
07/31Employment Cost Index0.70%0.60%0.80%
07/31S&P CoreLogic CS 20-City MoM SA0.20%0.20%0.20%0.16%
07/31S&P CoreLogic CS 20-City YoY NSA6.40%6.51%6.56%6.69%
07/31S&P CoreLogic CS 20-City NSA Index211.94210.17210.43
07/31S&P CoreLogic CS US HPI NSA Index202.95200.86200.82
07/31S&P CoreLogic CS US HPI YoY NSA6.38%6.41%6.39%
07/31Chicago Purchasing Manager6265.564.1
07/31Conf. Board Consumer Confidence126127.4126.4127.1
07/31Conf. Board Present Situation165.9161.1161.7
07/31Conf. Board Expectations101.7103.2104
08/01MBA Mortgage Applications-2.60%-0.20%
08/01ADP Employment Change186k219k177k181k
08/01Markit US Manufacturing PMI55.555.355.5
08/01Construction Spending MoM0.30%-1.10%0.40%1.30%
08/01ISM Manufacturing59.458.160.2
08/01ISM Employment56.556
08/01ISM Prices Paid75.373.276.8
08/01ISM New Orders60.263.5
08/01FOMC Rate Decision (Upper Bound)2.00%2.00%2.00%
08/01FOMC Rate Decision (Lower Bound)1.75%1.75%1.75%
08/01Wards Total Vehicle Sales17.00m16.68m17.38m
08/02Challenger Job Cuts YoY-4.20%19.60%
08/02Initial Jobless Claims220k218k217k
08/02Continuing Claims1750k1724k1745k1747k
08/02Bloomberg Consumer Comfort58.659
08/02Factory Orders0.70%0.70%0.40%
08/02Factory Orders Ex Trans0.40%0.70%0.80%
08/02Durable Goods Orders0.80%1.00%
08/02Durables Ex Transportation0.20%0.40%
08/02Cap Goods Orders Nondef Ex Air0.20%0.60%
08/02Cap Goods Ship Nondef Ex Air0.70%1.00%
08/03Trade Balance-$46.5b-$46.3b-$43.1b-$43.2b
08/03Change in Nonfarm Payrolls193k157k213k248k
08/03Two-Month Payroll Net Revision59k
08/03Change in Private Payrolls190k170k202k234k
08/03Change in Manufact. Payrolls25k37k36k33k
08/03Unemployment Rate3.90%3.90%4.00%
08/03Underemployment Rate7.50%7.80%
08/03Average Hourly Earnings MoM0.30%0.30%0.20%0.10%
08/03Average Hourly Earnings YoY2.70%2.70%2.70%
08/03Average Weekly Hours All Employees34.534.534.534.6
08/03Labor Force Participation Rate62.90%62.90%
08/03Markit US Services PMI56.256.2
08/03Markit US Composite PMI55.9
08/03ISM Non-Manf. Composite58.659.1