Josh Nye, the senior economist at the Royal Bank of Canada (RBC), notes that the U.S. employment growth rebounded to 224k in June and the unemployment rate ticked higher to 3.7%, while the wage growth was steady at 3.1% year-over-year.

• “A nice rebound in US payroll growth will do little to change market calls for the Fed to cut rates later this month, though a 50 basis point move looks less likely. It’s not that the jobs backdrop is weak. Despite some soft payroll reports in recent months, employment growth is tracking 172k year-to-date. That’s down from 223k in 2018 but still well above the ~100k pace of labour force growth.
• So while unemployment ticked up to 3.7% in June, it is still down from last year. Wage growth has been a bit less impressive though, losing momentum in recent months and remaining just above the 3% mark—not enough to generate significant inflationary pressure.”