The July labour market report upended the narrative of a solid labour market. The already weak headline figure of 73k jobs gained in July was dwarfed by the substantial revisions to the May and June figures, whose estimates declined by 125k and 133k respectively. This lowered the three month moving average from around 150k to 35k. This pace is well below even recent estimates of the ‘break-even rate,’ which would keep the unemployment rate constant, and indeed, it ticked up to 4.2%. In response, Trump fired the head of the responsible statistical agency and markets quickly priced in almost a full September rate cut. We don’t think the case is that clear.