Jobs spike makes it tough to cut interest rates

People walk past the entrance of the London Stock Exchange in London

In comments made to reporters outside the White House, Trump also touted the country's low unemployment rate of 3.7% and the 224,000 jobs added last month, in figures released by the Labor Department on Friday.

USA construction employment rose by 21,000 jobs last month after gaining 5,000 in May, while government payrolls rebounded by 33,000 after shedding 11,000 jobs in May.

Meanwhile, the Fed is sending fairly optimistic economic signals after opening up the possibility of cuts last month, when they cited muted inflation pressures and an economic outlook clouded by a US trade war and slower global growth.

The Fed Funds futures, a barometer of whether investors are expecting the Fed to cut rates or not, has been showing a strong chance of a rate cut this month and another later this year, with an outside change of a third. Unemployment will remain around 3.6%, the lowest rate in the decade.

Wages in manufacturing continue to lag the overall average, rising just 2.3 percent over the previous year.

The Friday jobs report was a positive economic data point showing that the longest economic expansion is still running. Health care and social assistance added 50,500 jobs.

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Wall Street's main indexes hit a closing record high on Wednesday on hopes of major central banks embracing looser monetary policy in the wake of slowing global growth and trade tensions. There were increases in healthcare and transportation and warehousing employment.

Shelton has a history of attacking the Fed's policies and has also supported the gold standard, under which the value of currencies like the dollar are fixed to a specific amount of gold.

Conversely, a strong jobs report could temper expectations of a Fed rate cut.

"Economic activity increased at a solid pace in the early part of 2019", with sturdy household consumption offsetting weak business investment and growing risks from a tariff-related slowdown in trade, the Fed said in one of its most pointed accountings yet of how the Trump administration's use of tariffs has affected the economy. The burst of hiring last month may suggest that employers are shaking off concerns about weaker global growth and the waning benefits from tax cuts. That pace should be sufficient to keep the unemployment rate around 3.6% and wages rising a little over 3%. Home sales are rebounding. Growth in the services sector, which includes such varied industries as restaurants, finance and recreation, slowed in June.

Overall, employers have been adding jobs faster than new workers are flowing into the economy.

Continuing jobs gains make Fed policymakers' debate over whether the economy needs stimulus even more hard, setting up a possible standoff with markets at their July 30-31 meeting. However, the market is still pricing in a 25-basis-point rate cut - expectations rose to 91% from 70.8%.

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