July Jobs Report Misread: Strategist Warns of Hawkish Fed Decision

Top strategist Skanda Amarnath from Employ America is warning markets that they're misreading the July jobs report. The report showed a decline of 23,000 nonfarm payrolls in July and a downward revision of May and June's payroll numbers by 103,000. This led to market expectations of a lower chance of a September rate hike.

However, Amarnath sees this as a dovish reaction that may be premature. He argues that the unemployment rate actually slipped to 4.1% in July, and that the decline in payroll numbers was largely due to seasonal adjustments, particularly a 50,000-job decline in local government education.

In Amarnath's view, the revised payroll numbers are not weak enough to force policymakers towards easing monetary policy. He also notes that inflation remains a significant obstacle, with June PCE inflation at 3.7%, far above the Fed's 2% target.