What June jobs miss means for Fed rate hike timing

Closing Bell Exchange: June jobs report
Did jobs report push back rate hike?
Jobs 'Goldilocks' number: Pro
One report (jobs) won't move Fed's thinking: Pro
Labor participation will bother the Fed: Cashin

Investors looking for clues on how the slightly weaker-than-expected June jobs report figures into the Federal Reserve's thinking on interest rates should relax, market watcher Richard Bernstein said Thursday, moments after the employment numbers were released.

"It's kind of a Goldilocks number—not too hot, not too cold," the CEO of Richard Bernstein Advisors told CNBC's "Squawk Box" in an interview. "I think if you were worrying that the Fed was going to rush to raise rates ... they're probably not in any rush to raise rates."

The CME FedWatch tool—which tracks market reaction on potential changes to the fed funds target rate—showed a 49 percent likelihood of a rate hike in December and a 66 percent chance in January 2016. The odds of a September increase dropped to just 10 percent.

On Thursday, a day early because of the long Independence Day weekend, the government said nonfarm payrolls increased 223,000 in June. The unemployment rate ticked lower to 5.3 percent.

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The unemployment rate is now just a quarter to a half a percent away from signaling the United States has reached full employment, said Jan Hatzius, chief economist at Goldman Sachs. However, the overall amount of slack in the labor market is greater than the rate suggests, something that Fed Chair Janet Yellen has noted in the past, he added.

"What's important is that there are other aspects of labor market slack that aren't captured by the unemployment rate—people who are involuntarily part-time employed, and also people who have dropped out of the labor force for cyclical reasons and might come back if labor demand continues to improve," he told CNBC's "Squawk on the Street."

"The jobs number is the best glimpse in a moment of time of how the economy is doing. This jobs number is a little disappointing, but it's still pretty solid and not inconsistent with 3 percent growth," said AEI's Kevin Hassett, former Fed economist and ex-GOP campaign advisor.

Economic data has skewed positive by a 2:1 ratio over the last six weeks, said Ethan Harris, co-head of global economic research at Bank of America Merrill Lynch. While the jobs report falls on the negative side of the ledger, the Fed must look at a broad array of data, he said.

"If we get the same data we've gotten in the last six weeks in the run up to the September FOMC, the Fed will hike interest rates," he told "Squawk on the Street."

Dan Greenhaus, chief global strategist at BTIG, said a bounce back to 3 percent GDP growth is not as strong as the second-half rally in 2014, but it's sufficient to support a rate hike. "Whether it's 25 or 50 basis points remains to be seen, but I would think the data supports at least marginally tightening policy."

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"The job market has been growing at a rate that sort of corresponds with maybe 3.5 percent or 4 percent," said Austan Goolsbee, former Obama Council of Economic Advisers chairman. "[But] GDP is growing at a rate, let's call it, 2.5 percent."

The professor at The University of Chicago Booth School of Business told "Squawk Box," "The real puzzle is do you think growth is going to go up to where the jobs are or do you think job growth is going to come down to where the GDP is."

Art Cashin, UBS' director of floor operations at the NYSE, reiterated his call that the Fed would not raise rates this year after the jobs report, citing the drop in labor force participation rate in June, weakness overseas, and the warnings from the World Bank and International Monetary Fund that a 2015 rate hike may be ill-advised.

"To fly in the face of that, if something comes up, they risk all their credibility," he told "Squawk on the Street."