Does it count? What would appear to be a “blowout” employment report in the US on Friday created a favorable environment for risk assets, but carried with it a footnote. After a few months of weak reports, today’s news of 287,000 jobs added well exceeded the consensus estimate of 180,000. Job gains were broad-based not only across services (leisure and healthcare) but also manufacturing which has been the struggling sector of the US economy as US Dollar strength lessened the country’s competitive export position. Markets reacted favorably to the news with short-dated Treasury yields rising (as expectations for Fed action later this year increases at the margin) and equity markets rallied. However, this report comes with a few caveats, the least of which is the data aberration caused by a large scale strike at telephone company Verizon. The first major caveat is what we will call “averaging out.” One strong report does not make a trend. Averaging this report into the last one smooths out the job gains to about 149,000 jobs per period – not bad but not screaming massive hiring. In addition, wage growth year-over-year was 2.6%: slightly below the 2.7% expected, the 3.5% rough average over a long period, and the historical 4% top of a cycle in a tight employment environment. So a basic element of sustainable inflationary pressure (rising wages) still has some improving to do. The second caveat is calendar based. The June report reflects activity over the month. The macro concern de jour is the impact of Brexit, part of which is its impact on corporate activity including hiring even here in the US. With the UK referendum decision announced on June 24th, it cannot be expected that enough hiring/firing decisions occurred in the remaining measurement period to give a sense. We continue to believe that the US economy is only modestly exposed to the uncertainty that will play out across the pond, but it will be the data over the next couple of months that is needed to start proving it.