Low scoring labor market

U.S. labor data sent a mixed signal in June, with payroll growth slowing sharply to 57,000 jobs and private hiring also missing expectations by a wide margin.

Even so, the broader backdrop is not collapsing. Unemployment fell to a one-year low, layoffs remain contained, and job openings still point to an economy that is cooling rather than breaking.

The softer report may ease pressure on the Federal Reserve and reduce near-term rate hike fears, which has helped markets look past the weak headline number. Still, investors should watch for volatility as inflation remains sticky and equities sit at elevated levels heading into late summer.