The 38,000 increase in non-farm payrolls in May, which is still only 73,000 if we adjust for the 35,000 striking Verizon workers, means that a June rate hike from the Fed is now very unlikely. (Consensus forecast 160,000, CE forecast 120,000.) A July hike is still possible, but it would require clear evidence of a rebound in June’s payroll figures (and a UK vote to remain in the European Union). That sound you hear is Fed Chair Janet Yellen furiously re-writing the speech that she is scheduled to give on Monday.
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