This is the third consecutive report where employment growth records a below-200k number. On the other hand, the UE (Unemployment) rate surprisingly jumped an eye-popping three tenths to 3.8%, as the labor force surged. Average hourly earnings surprised expectations to the downside for the first time since February.”

Data out this week supports the idea of an economy that is gradually losing momentum as it continues to normalize after a rapid tightening of monetary policy and the easing of a large Covid-driven supply shock. 

We think this week's labor-market and consumer prices data should be judged as positive news by Fed officials, and we continue to view July as the last hike of the Fed's tightening cycle.

Data is likely to remain choppy in the next several months and markets are unlikely to move in a straight line.