INSTANT VIEW: Reaction to payroll data

WILLIAM SULLIVAN, CHIEF ECONOMIST, JVB FINANCIAL GROUP, BOCA

RATON, FLORIDA:

"The big news is the rise in unemployment claims to 404,000 which you must keep in mind because it's pointing to continued labor market weakness into the second half of the year.

"The report on the employment situation for June underscores the continued weakening in the overall economic environment. The big surprise was the maintenance of the nationwide unemployment rate at 5.5 percent. The unemployment rate took a huge jump in May, the largest monthly increase in 22 years, and there was the appearance of some statistical quirks that suggested there might be some rollback in June. That it held steady in June just underscores the poor labor market conditions as the second quarter came to the close.

"Another interesting development is the evidence of deterioration in service sector payrolls. We know we've been processing sharp declines in goods producing payrolls. It now looks like the service establishments have stopped hiring as well. We've turned very soft here in terms of hiring conditions overall, not just in the goods-producing sector."

CARL LANTZ, U.S. INTEREST RATE STRATEGIST, CREDIT SUISSE, NEW

YORK:

"They are all weak. There was 52,000 net revisions to the prior two months so minus 62,000 is kind of more like minus 114,000. Jobless claims were very elevated above 400,000.

"Trichet is on the tape right now being hawkish so the bond market is kind of getting pulled in both directions.

"The bond market is roughly unchanged to a little bit softer after the numbers. The market was geared up for weak numbers and so this isn't a big surprise relative to the whisper number. Now the focus starts moving toward what Trichet is saying and whether the Fed has to respond."

DAVID RESLER, CHIEF ECONOMIST, NOMURA SECURITIES INTERNATIONAL,

NEW YORK:

"Payrolls were pretty much in line with expectations and confirmation that the economy is weak and that weakness is likely to continue. It might even get worse. The weekly jobless claims probably tell us that next month's job losses could be even worse than this one. So far we have lost these jobs primarily because of attrition, not because of layoffs and now the layoffs seem to be starting to kick in.

"This does not change the big picture but other things have changed the big picture. The run on oil prices have led me to materially lower my forecasts for growth."

MICHAEL WOOLFOLK, SENIOR CURRENCY STRATEGIST, BANK OF NEW YORK

MELLON, NEW YORK: