U.S. nonfarm payrolls added 528,000 jobs in July, well above the consensus expectation of 250,000, and the biggest gain since February. Private payrolls posted a 471,000 gain in July versus consensus expectations of 230,000 and also the biggest gain since February (see first chart). Overall, the jobs report is a positive result.
Despite the strong results, a substantial preponderance of recent data suggest headwinds for the economy. An aggressive Fed tightening cycle, near-record-low consumer attitudes, rising initial claims for unemployment insurance, and a weakening housing market offset some of the positive effects of the strong July jobs report. Furthermore, ongoing disruptions to global supply chains add to the headwinds. Caution is still warranted.