Jobs report SHOCKS expectations but markets SURGE

• June nonfarm payrolls added +57K jobs, below the +110K estimate, with significant downward revisions for April and May (-74K total).
• The unemployment rate fell to 4.2% (vs. 4.3% estimate), and average hourly earnings increased by 3.5% year-over-year.
• Analysts view the report as indicative of productivity-driven, disinflationary growth, leading to a market surge and expectations of fewer Fed rate hikes.

The June jobs report showed nonfarm payrolls added +57K jobs, missing the +110K estimate, but the unemployment rate fell to 4.2% (vs. 4.3% estimated). Average hourly earnings rose 3.5% year-over-year. Markets surged on a 'Goldilocks' interpretation, suggesting disinflationary growth and potentially less aggressive Fed rate hikes.