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The U.S. economy added 164,000 jobs in July. That’s down from the 193,000 jobs added in June (revised down from an initial 224,000) and slightly higher than the 160,000 jobs forecast by economists surveyed by

At 3.7% the headline unemployment rate was even with the 3.7% rate in June. The U6 unemployment rate, which includes discouraged workers who have stopped looking for work and workers with part-time jobs who would like full-time work dropped to 7.0% from 7.2% in June.

Average hourly earnings rose 0.3% in the month after the June increase was revised upwards to 0.3% from the prior report of 0.2%. Over the last 12 months, average hourly earnings have climbed 3.2%. The 12-month increase as of June was 3.1%.

In sum there’s nothing in this report that would lead the Federal Reserve to aggressively cut interest rates. Indeed if all the Fed were looking at was traditional measures such as wage inflation, unemployment, and inflation, there wouldn’t be much of an argument for cutting rates at all at the September 18 meeting. Yet, since the Fed indicated in its post meeting comments on Wednesday that it is now focused on the dangers of a slowdown in the global economy as a result of the U.S.-China trade war and other tariff battles, the odds of another 25 basis points interest rate cut as reflected in prices in the Fed Funds Futures market hit 99.6% today (or an effective 100% since there’s a 0.4% chance of a 50 basis point reduction in interest rates, according to the CME FedWatch Tool.) Thats up from  85.4% odds of an interest rate cut yesterday and a 67.5% chance of a cut on July 26.

Treasury bond prices climbed slightly this afternoon, which means that yields fell slightly. The yield on the benchmark 10-year Treasury fell to 1.85%, a four basis point drop. The yield on the 2-year Treasury slide slightly to 1.74%, a drop of one basis point from yesterday.