June’s Employment report was posted at 8:30 AM ET this morning, varying from its traditional Friday morning posting because of the holiday tomorrow. It showed that the U.S. unemployment rate slipped 0.2% to 5.3% while 223,000 new payrolls were added to the economy. The third headline number we watch is average hourly earnings that showed no change from May’s level. Analysts were expecting to see a 5.4% unemployment rate, 230,000 jobs and a 0.2% rise in earnings. Technically, the unemployment drop is bad news for bonds and mortgage rates but it is being attributed to a significant drop in people participating in the labor force. However, the weaker than expected payroll number and the fact that May’s and April’s job numbers were revised lower by a total of 60,000 jobs are favorable news. In addition, the weaker than forecasted earnings reading is preferred by bond traders. Therefore, we can consider this report good news for bonds and mortgage rates.