Closing The Curtain On Rate Cuts

2026-07-08 15:05:00 ET

By Kevin Flanagan

The June jobs report underscored our thesis that while the labor market remains in the 'economic plus column,' some of the prior months' increases in new hiring seemed a bit too high. Right on cue, the Bureau of Labor Statistics ((BLS)) reported that total nonfarm payrolls rose less than expected and that the prior two months’ gains were revised downward (see Figure 1). Moderate real gross domestic product growth, above Fed-target inflation, and Warsh & Co. on hold are our primary themes for the second half of 2026, and this employment report plays right into those scenarios. Here are some key takeaways:

• Total nonfarm payrolls rose +57,000, or only about half of the consensus estimate, while the prior two months’ gains were revised downward by -74,000. That places the ‘new’ 3-month moving average tally at +111,000, a bit more in line with what we expect going forward.

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