The US enjoyed a gain of 222K jobs but wages remained stuck at 2.5% once again. What’s next?

Here is their view, courtesy of eFXnews:

CIBC Research comments on today’s US jobs report for the month of June:

“US payrolls showed a significant rebound in employment, but still little progress in terms of wage inflation. The 222K gain in payrolls compared to a consensus forecast of 178K and was accompanied by a cumulative upward revision of 47K to the prior two months. While the unemployment rate ticked up to 4.4%, that was due to a rise in labour force participation.

However, even with the return to strong employment gains following a few disappointments, wages inflation remains fairly muted. Average earnings rose 0.2% on the month (consensus 0.3%) and a downward revision to the prior figure meant that the year-over-year rate of inflation, at 2.5%, was also a little below expectations.

So there’s something in this report for hawks and doves alike on the FOMC, and as such it shouldn’t change expectations that the Fed will take a pause from rate hikes in September to start the balance sheet unwind, before hiking again later in the year,” CIBC argues.