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Earlier this week economists were projecting the official government jobs report due on Friday, that is tomorrow, would show that the U.S. economy added just 200,000 jobs in June.

This morning, however, the ADP Research Institute’s survey of private employers showed the economy added 497,000 jobs in June. That’s more than twice the 220,000 gain that economists had projected for this report. And way above the 267,000 jobs reported by this survey in May.

The numbers from the Department of Labor don’t always track the ADP report very closely. But the fact that the ADP survey crushed economists’ projections for that report and ran so far ahead of the May jobs total, does argue that the financial marts are going yo have to cope with a big outside surprise in the official June report tomorrow.

That would, of course, increase the odds that the Federal Reserve will raise interest rates at its July meeting (which was already looking like a lock) and at the September meeting too.

That would be a significant disappointment to those investors and traders who have been counting on the Fed to stop raising interest rates and quickly moving to cutting rates.

The financial markets didn’t like the news today but the drop in stocks and bonds was rather tempered–which to my mind suggests that there’s more room for declines on Friday if the Department of Labor’s report is similarly strong.

The Standard & Poor’s 500 fell 0.79% at the close, for example, but that’s roughly where the index was (a drop of 0.84%) at 1 p.m. In other words, the index didn’t sell off further during the day in anticipation of worse news tomorrow.

The Dow Jones Industrial Average closed lower by 1.07%. The NASDAQ Composite ended down 0.82% and the NASDAQ 100 was off 0.75% at the close. The small-cap Russell 2000, which tends to be the index most sensitive to sentiment on the economy, fell to close off 1.64%.

Over on the bond side, the yield on the 10-year Treasury rose to 4.03%, up 10 basis points on the dy. The yield on the 2-year Treasury, which had briefly moved above 5%, closed at 4.98%.