U.S. Job Growth Slows Sharply as June Payrolls Add Just 57,000 Positions

This morning’s data may temper expectations for a Federal Reserve rate hike as early as this summer or early fall, as weaker-than-expected employment figures signal cooling momentum in the labor market.

U.S. job growth came in below forecasts last month, potentially pushing back market bets on a Fed rate increase in the coming months. The June Nonfarm Payrolls report showed the economy added 57,000 jobs, released Thursday morning.

That figure fell well short of the 110,000 expected by economists and also marked a sharp slowdown from May’s revised gain of 129,000, down from an initially reported 172,000.

The unemployment rate edged down to 4.2%, compared with expectations of 4.3% and May’s reading of 4.3%. The decline came despite weaker hiring, driven by a drop in the labor force participation rate, which slipped to 61.5% from 61.8%.

Bitcoin BTC $61,813.31, which had been trading strongly ahead of the release, held above $61,000 and was up about 4% over the past 24 hours.

Equity markets reacted positively to the data, with Nasdaq 100 futures rising about 0.7% after being roughly flat ahead of the report. Meanwhile, the 10-year Treasury yield eased by four basis points to 4.46%.

Shifts in interest rate expectations have been a major macro theme this year. Earlier optimism around rate cuts—fueled in part by political pressure from President Trump for lower borrowing costs and speculation over Fed leadership changes—had shaped market positioning for 2026 policy easing.

However, rising energy prices pushed inflation higher in the first half of the year, prompting a more hawkish stance from new Fed Chair Kevin Warsh, who surprised markets with a tighter policy outlook at the most recent Federal Reserve meeting.

Following the latest jobs data, rate expectations are already adjusting. CME FedWatch data showed that the probability of one or more rate hikes by September fell from about 65% to 50% in the minutes after the release.