U.S. Employers Added More Workers in June Than Forecast
Comment of the Day

July 07 2013

Commentary by David Fuller

U.S. Employers Added More Workers in June Than Forecast

Here is the opening for today's main news story, reported by Bloomberg
Employment increased more than forecast in June, wages picked up and the U.S. jobless rate held close to a four-year low as the world's largest economy weathered the effects of higher taxes and federal budget cuts.

Payrolls rose by 195,000 workers for a second straight month, the Labor Department reported today in Washington. The median forecast in a Bloomberg survey projected a 165,000 gain after a previously reported 175,000 increase in May. Thejobless rate stayed at 7.6 percent, while hourly earnings in the year ended in June advanced by the most since July 2011.

Job gains, rising incomes and a rebound in housing are giving Americans reason to boost the spending that accounts for 70 percent of the economy. Stocks climbed after the report, while Treasuries dropped, sending the 10-year yield to the highest in almost two years, on expectations the data make it likelier theFederal Reserve will start trimming the $85 billion monthly pace of bond purchases in September.

"The job market is stronger," said Harm Bandholz, chief U.S. economist at UniCredit Group in New York and the top forecaster of payrolls over the past two years, according to data compiled by Bloomberg. "It's a good number, especially with the upward revisions." Fed "tapering is getting closer."

David Fuller's view This is the jobs creation report that roiled Wall Street today before it recovered and closed with gains of 1%.

The bigger market event was another surge in Treasury bond yields. US 10-year Treasuries are a full point higher than they were two months ago. This is discussed further below and particularly in Eoin's section and the Audio.

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