REFILE-INSTANT VIEW-US job growth sharply slows in July, unemployment rate ticks higher

NEW YORK, July 31 (Reuters) - U.S. job growth slower much more than expected in July, and the data from the prior month was revised sharply lower, indicating the labor market could be showing signs of stalling.

Nonfarm payrolls increased by 73,000 jobs in July, after rising by a downwardly revised 14,000 in June, the Labor Department data showed on Thursday. Economists polled by Reuters had forecast 110,000 jobs added last month.

The unemployment rate rose to 4.2% in July from 4.1% in the previous month.

MARKET REACTION

STOCKS: S&P E-minis EScv1 pared declines and were last down 0.75%

BONDS: Treasury yields dropped, with the yield on benchmark U.S. 10-year note US10YT=RR down 5.9 basis points at 4.301% and the two-year note yield US2YT=RR down 13.2 basis points to 3.891%

FOREX: The dollar weakened sharply, with the dollar index =USD down 0.72% to 99.31

COMMENTS:

BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN:

"If Powell knew then what he knows now, maybe even he would have dissented from the decision to continue the rate cut pause. There’s no way to pretty-up this report. Previous months were revised significantly lower where the labor market has been on stall-speed.

"History is repeating itself. Last year the Fed messed up by not cutting in July so they did a catch-up cut at their next meeting. They’ll likely have to do the same thing this year."