Think the real takeaway is that this keeps the Fed on hold.

It is jobs Friday, and today's report is getting extra attention as the Fed counts down to its next meeting, examining each data point very closely to determine whether or not to cut rates. I wanna bring in Marta Norton, our chief investment strategist. And Marta, today's numbers were actually better than expected. Economists were calling for the unemployment rate to rise. It actually fell to four point one percent, and the economy added a hundred and forty seven thousand jobs. You just went through the numbers. What's your first take?

Well, there's no question that this was a good report relative to expectations.

Another piece of good news, prior numbers, revisions to those were actually positive. I think the real takeaway is that this keeps the Fed on hold. In fact, the market's immediate reaction to this report when it dropped was to reduce the odds of a July cut close to zero.

So what stands out to you once you look past those top headline numbers?

Sure. So some trends like strong hiring and education that has continued this month. What's interesting is what's happened at the government sector. So federal jobs continue to decline, but the state level hiring really jumped out and in some ways carried the report. I think one thing that's important to note, the drop in unemployment was caused by people leaving the labor force rather than people getting hired. So according to Bloomberg, employment went up by ninety three thousand. Job seekers, though, came down by two hundred thousand.

Interesting. I wanna follow-up a little bit on that point, Marta, about job seekers leaving the labor market because it lines up with that low hiring, low firing trend that you've been talking about, and it is starting to feel like the new normal. For people who are thinking about switching jobs, making a career move right now, what does this environment mean for them?

Well, it's no question that we're not in the job market that we once were post COVID, where jobs and pay rises were really falling off trees. But that was more the exceptional market. So a return to normal isn't necessarily a sign of weakness. The question, of course, is where we're headed, what those future trends look like. And when we're taking a look at particularly hiring, the general sense that we have is that we're in this period of continued gradual cooling.

And, Marty, we know there's another big factor in play here, tariffs. Chair Powell did hint this week that they likely would have already cut rates if not for the inflationary impact of trade policy. So how much do you think trade policy and tariffs are weighing on the Fed's thinking right now?

Powell has said that the Fed has been caught off guard by the scale of the tariffs, but he's also said, I think appropriately so, that the Fed is looking at fiscal policy in its entirety, and the tax package may be mildly stimulative. So he's called out summer data as particularly important when it comes to dividing where the Fed goes from here. So keeping an eye on what reports look like over the course of the summer is going to be particularly important.

So bottom line, this jobs report suggests that a July cut is not in the cards, but we'll be watching that summer data closely along with Powell to see where the Fed goes next.

That's right.

Marta, thank you so much. Great perspective and insights as always. And with that unemployment rate unexpectedly dipping, all eyes now turn to next week's headlines and data. We're gonna be watching it very closely for you. Until then, have a great holiday. Enjoy the fourth of July.