On the downside, by far the biggest disappointment in today’s report is the massive 26K decline in retail trade employment, the biggest drop since December 2012, as many big box retailers are trimming staff in the wake of greater competition from online sales.
The unemployment rate ticked down to 4.7% from 4.8% as household employment jumped by 447K while only 340K people entered the labor force, meaning the increase in the labor force was fully absorbed, while 107K people who were already in the labor force, but were not working, also found jobs.
The stock market rose mildly early after today’s report as rising employment and wages portend stronger consumer spending, but also higher labor costs. The Fed is expected to raise the Fed Funds rate by a quarter point next week as inflation continues to accelerate. Higher rates could put a dent in the housing and vehicle markets, which may offset any lift from more business-friendly economic policies.