Goldman Sachs: Cumulative probability for rate hike by Dec unchanged at 60% post-NFP

Following Friday’s stellar US jobs report, analysts at Goldman Sachs are out with their reaction on the same and its implications on the Fed’s next policy move.

Key Quotes:

"Nonfarm payrolls ... reflecting broad-based growth across industries

We left our Fed probabilities unchanged, with subjective odds for the timing of the next rate hike at 5% for September, 5% for November, and 50% for December, for a 60% cumulative probability of at least three hikes this year

Solid growth in manufacturing jobs

Modest rise in construction employment

Unchanged mining and logging payrolls

Employment growth in private service-providing industries accelerated to a 10-month high

Retail employment was soft for the second month (+1k) but nonetheless remained firmer than the outright declines seen in each of the previous four months

Government payrolls rose 4k

The breadth of job growth was particularly encouraging

Unemployment ... broader U6 rate remained unchanged at 8.6%, as a decline in the share of workers on part-time schedules for economic reasons was partly offset by an increase in the share of marginally attached workers"