KEY DATA: ADP Jobs: 172,000; Small: 95,000; Small: 25,000/ Layoffs: 38,536/ Claims: Down 16,000

IN A NUTSHELL: “The only thing that seems to be holding back the labor market is skittishness on the part of large corporate CEOs.”

WHAT IT MEANS: Tomorrow is the “all-important” employment report and after the May debacle, we could really use a good one. That could happen, as the recent labor market data have been quite good. Earlier this week, the Institute for Supply Management reported that nonmanufacturing companies increased their hiring, which echoed their manufacturing report. Also, the Paychex/IHS small business index jumped in June. Today, we got three reports that all pointed to stronger job growth.

The ADP private sector job number came in above expectations. Small and medium sized businesses added workers solidly. The only laggard was the large corporate sector, especially firms that employ 1000 workers or more. Big company CEOs have been the least optimistic for much of this recovery and their failure to actively hire, which stands in stark contrast to small business employers, is what is restraining the economy.

Challenger, Gray and Christmas reported that layoffs in June were down almost 15% from June 2015. The number of job cuts slowed in the past two months as the energy sector stabilized. Remember, the payroll change is the difference between job losses and gains, so the smaller the number of layoffs, the larger the gain. Of course, these are just announcements and there is a lag between notices and actual reductions, if those reductions actually occur.

Finally, unemployment claims plummeted and we are back at record low levels when you adjust for the size of the labor force. That reinforces the view that firms are holding on to their workers tightly.

MARKETS AND FED POLICY IMPLICATIONS: Despite two consecutive modest job growth numbers, the labor market does not seem to be faltering. The apparent willingness of small business owners to bring on new workers is a clear sign that the economy is moving forward solidly. Indeed, second quarter GDP should be pretty good, showing that at least the domestic U.S. economy is in good shape. But will a strong job number and solid GDP growth matter to the Fed? Probably not. The members are like pinballs, bouncing from one temporary crisis to the next. Whether it was China, or the equity markets, or emerging markets, or a GDP or job slowdown or now Brexit, none of which changed the course of anything, the Fed told us that it would act cautiously. With the Brexit issue needing time to run its course, and the Fed indicating in the minutes of its June meeting that it wanted to know more about the potential impacts of Brexit, the likelihood of a Fed move anytime soon has disappeared. Really, if in order to raise rates again, the Fed members need a perfect world of solid U.S. job and economic growth, above-target inflation and no problems anywhere around the world, why don’t they just come out and admit they have no desire to raise rates. The chances of all those things occurring at once are slim. But, Chair Yellen and her merry band of skittish monetary authorities will continue the fiction that every meeting is “a live one”. Please, get your act together and just come out and say that the Fed would rather risk having few bullets when the next downturn occurs than raising rates and risking that the economy falters. That is the choice the members are facing and they routinely vote to keep the chamber empty.