Core Viewpoint - The report from China Galaxy Securities indicates that the new non-farm employment figures were weaker than expected, with a significant downward revision of 258,000 jobs from previous months, and the unemployment rate rising to 4.25% [1][2][3] Employment Data Summary - New non-farm jobs added in July were 73,000, below the market expectation of 110,000; June's employment was revised down from 147,000 to 14,000, and May's from 144,000 to 19,000, totaling a downward revision of 258,000 jobs [2] - The non-farm hourly wage growth accelerated to 0.33% month-on-month and rose to 3.91% year-on-year [2] - The unemployment rate increased to 4.248% from the previous 4.117%, while the labor participation rate decreased to 62.2% [2] Labor Market Analysis - Concerns about the quality of labor data have emerged, as the significant downward revisions in employment figures for May and June have pushed the three-month average of new jobs into a range that could theoretically support rising unemployment [3] - Despite the weakening labor market, the extent of this weakening may not be sufficient to justify a rate cut by the Federal Reserve in September [3] - The quality of labor data is deteriorating, which complicates the Federal Reserve's decision-making process regarding interest rates [4] Economic Contribution and Outlook - The labor market's contribution to consumption remains stable, with no significant weakening observed; thus, the unemployment rate may not drop to levels that would compel the Federal Reserve to lower rates before the September FOMC meeting [5] - The report suggests that the probability of the unemployment rate exceeding 4.4% and forcing a rate cut is low, given the current economic conditions [5] Market Reactions - The market has significantly increased its pricing for rate cuts, with expectations for three rate cuts totaling 75 basis points by December 2025 [6] - Major stock indices such as the S&P 500, Nasdaq, and Dow Jones have experienced notable declines, while the yield on 10-year U.S. Treasury bonds has decreased significantly [7]