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Some believed that the increased number of people looking for jobs weighed on wage growth.
The improving employment numbers are also strengthening the argument for further Federal Reserve interest rate hikes. For instance, Janus Henderson’s Bill Gross told Bloomberg that he expects the central bank to go through with a third increase this year, likely in December.
“What this should do is to keep the Fed for another rate hike,” Quincy Krosby, a market strategist at Prudential Financial Inc., told Bloomberg. “The market has absorbed the fact finally that Janet Yellen is seemingly intent on moving toward a neutral rate. If this were a weak number, the market could be down because again the notion would be that she’s raising rates in an environment in which the economy is pulling back.”
Options traders are now betting on a 50.9% chance the Fed will hike interest rates at its December meeting.
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