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Jobs Report Misses, But Solid Fundamentals Keep Labor Market on Track

Today's jobs report came in a bit below expectations, but is overall solid and doesn't introduce any major curve balls into a steady job market this summer.

The good news is that the labor market is holding steady and continues to add jobs, with the past three months at a well-above average 232,000 job gains over the past three months.

For the Fed, the mixed picture means they can likely relax a little over this labor day weekend. The report was not strong enough to suggest they need to act quickly on rates, and in fact showed some underlying weaknesses that gives a case for waiting.

One area of caution showed up in losses for jobs in mining, construction, and manufacturing. The gain in private-sector service jobs was 150,000, offset slightly by a loss of 24,000 goods-producing jobs (government jobs gained 25,000).

Another was continued slow wage growth, which came in equal to last month and below expectations. Meanwhile, labor force participation was also unchanged, and still bumping along a relatively low level despite plenty of job demand across industries in the U.S.

Finally, in another reassuringly boring number of the Fed, the unemployment rate was unchanged at 4.9% for the third month in a row.