In July, the U.S. economy added 528,000 jobs which was nearly double analysts' consensus expectations of 258,000 new jobs. Some other notable items from the report were the unemployment rate falling to 3.5%, while wage growth also increased more than expected at an 0.5% monthly rate and 5.2% annual rate.

Stocks initially declined on the print as it increases the chances of a 75 basis point or even 100 basis point hike at its next meeting. Some market commentators were also saying that the data means that the Federal Reserve should call for an inter-meeting hike. Bulls countered that it shows that the economy is much more resilient and has the capacity to absorb higher rates. And, stocks did manage to recover the bulk of their losses by the market close.

With the market in the midst of a major bear market rally as it's focused on the Fed and the possibility of a looming recession, economic data is even more important at this point. Therefore, the market has been moving even more than usual on data releases like the ISM manufacturing and services prints in addition to Friday's jobs report and this week's Consumer Price Index (CPI) as these will make it clear whether the economy is falling into a recession or not, and what the Fed's next move will be.

The biggest contributor to the strong report was the leisure and hospitality sector which added 96,000 jobs but remains 1.2 million short of its pre-pandemic level. Professional and business services saw a gain of 89,000. Health care contributed 70,000, and government payrolls increased by 57,000. In a surprise, construction and manufacturing added 32,000 and 30,000 jobs, respectively.

There were also positive revisions to the May and June jobs report by 2,000 and 26,000, respectively. It's also an indication that the labor market remains strong despite the Fed tightening and pain seen in various parts of the economy which includes GDP going negative for 2 straight quarters.