June brought more jobs than analysts had expected, and the unemployment rate remained steady at 7.6 percent.
Here’s the counterintuitive part: The positive news brings with it worries that the Federal Reserve will slow down its bond purchases by the end of the year, leaving the U.S. economy to fend on its own. And meanwhile, interest rates have been skyrocketing.
“People believe … that the program ending will eventually lead to the Fed raising rates, and so rates are going up ahead of that in sort of a forecast,” CNBC’s John Carney explained. “And it’s not clear that the market’s right about that. We have Fed guys coming out saying ‘Just because we end quantitative easing doesn’t mean we’re going to come in and raise rates right away.’ But the market doesn’t trust them, it seems.”
But the jobs report was still positive, and people are beginning to see it that way.
“The numbers were good, they came in above expectations,” said the New York Times’ Catherine Rampell. “And the unemployment rate stayed flat, but that’s actually kind of a good thing in that more people joined the labor force, as well as more people getting jobs. So generally speaking, this was a pretty positive report.”
And every week, the Wrappers suggest the #longreads you should bookmark for the weekend.
From Catherine Rampell:
- The rocker who was kicked out of Nirvana and Soundgarden, and then went on to become a war hero.
- One explanation for how MIT became an economic powerhouse: because it was unusually open to hiring Jewish economists in the 1940s.
- The American way of birth is the costliest in the world.
Per John Carney:
- For all those watching Wimbledon: The evolution of bad tennis.
- Borrowing more money now almost cheaper than borrowing less money.
- Basel report finds diverging bank views on risk.
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