The US jobs report came in south of expectations, with non-farm payrolls increasing by 559,000 in May but the unemployment falling to a pandemic low of 5.8% vs 6.1% in April. While the job gains were double, the upwardly revised April total of 278,000, the fact that they were short of expectations means the Fed can remain on hold indefinitely. In the absence of other mitigating data, that’s actually supportive of risk assets due to the looseness of financial conditions. If you recall, yesterday’s numbers from ADP and initial claims showed upside momentum. And that makes todays’s miss all the more disappointing, because, at the margin, these beats would have lifted expectations for 650,000 jobs. But now, we have to explain why we are seeing such tepid growth in employment in an economy 7.5 million jobs short of pre-pandemic levels. It’s the decline in the labor participation rate that is the most salient factor in understanding the data.…