June Jobs Report Beats Estimates in U.S., Showing 147K New Positions and Unemployment Slipping to 4.1%.

Strong June Jobs Report Weakens Case for July Fed Rate Cut

A stronger-than-expected U.S. employment report for June has diminished the likelihood that the Federal Reserve will lower interest rates later this month.

Data from the Bureau of Labor Statistics released Thursday showed nonfarm payrolls increasing by 147,000 in June, exceeding economists’ predictions of 110,000. This figure was also slightly higher than May’s revised tally of 144,000, which was previously reported as 139,000.

The unemployment rate fell to 4.1% in June, coming in below expectations of 4.3% and improving from May’s 4.2%.

Bitcoin
BTC

$1,07,993.29
edged lower following the report, trading just under $109,000. The cryptocurrency had been climbing in the days leading up to the release, briefly surpassing $110,000 to reach its highest point in about a month.

U.S. stock futures rose in response to the employment data, with the Nasdaq 100 and S&P 500 both up roughly 0.3%. Meanwhile, the yield on the 10-year Treasury note jumped nine basis points to 4.36%.

Investors have been closely monitoring economic signals for clues about the Fed’s next policy steps. Although a few Fed officials have suggested that rate cuts could be on the table in July, Chair Jerome Powell has repeatedly emphasized that the economy remains sufficiently strong to allow the central bank to wait before easing policy.

This cautious approach has set up a contrast between Powell and President Trump, who has been vocal in calling for immediate and significant interest rate reductions.

Prior to Thursday’s employment release, traders had assigned around a 75% chance that the Fed would keep rates steady at its meeting later this month, according to CME FedWatch data. For September, the odds of at least one 25-basis-point rate cut stood at 95%.

But the strong jobs numbers shifted market expectations quickly: within fifteen minutes of the report’s release, the probability of a rate hold in July rose to 95%, while the chance of a September cut slipped to 78%.

Additional details from the report showed average hourly earnings rising 0.2% in June, falling short of forecasts for a 0.3% increase and lower than May’s 0.4% gain. On an annual basis, wages were up 3.7%, slightly below expectations of 3.9% and down from May’s 3.8%.

The employment report was published a day early because of the July 4 holiday. Both the NYSE and Nasdaq planned to close early at 1 p.m. ET Thursday, and bond markets at 2 p.m. ET. All U.S. markets will be closed Friday.

In separate data also released Thursday, weekly initial jobless claims dropped to 233,000 from the prior week’s 237,000, beating projections of 240,000 and signaling ongoing strength in the labor market.