Economic Update - Jobs Still Strong

Stocks are having a shaky Thursday as investors are worried that a strong payroll report could signal more rate hikes. Stocks are coming off a losing day yesterday as we digested the June FOMC minutes. The minutes showed that almost all FOMC members supported further rate hikes, though at a slower pace than what the last year brought.
For economic data today, the ADP Employment Report showed that private payrolls added 497k jobs in June, easily beating the expected 220k on the way to the largest increase since July 2022. Leisure and hospitality led the way with 232k.

Initial jobless claims increased to 248k, up from 236k last week. Claims were expected to be 245k. Continuing claims were mostly unchanged at 1.72 million.

Elsewhere, the JOLTS report showed that job openings fell to 9.82M, down from 10.32M last month. Lastly, the ISM Services Index increased to 53.9 in June as both employment and new orders rose, while prices paid fell to the lowest level since March 2020.
Wrapping up data, the US Trade report showed the deficit fell 7.3% to $69B in May, in line with expectations. Imports were down 2.3% and exports fell 0.8%.

Treasury yields are higher, with the 2-year T yield up 11.4 basis points to 5.02%, the 5-year T yield down 15.6 basis points to 4.38%, and the 10-year T yield up 10.4 basis points to 4.05%. Advance rates are higher throughout the curve today.