Jobs data surprises as US hiring expands, defying expectations
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The news: US job growth continued to expand in June, defying economists who had predicted a slowdown in hiring driven by trade and fiscal policy uncertainty.
The numbers: The US added 147,000 jobs in June, the Labor Department reported, ahead of the gain of 110,000 jobs economists polled by The Wall Street Journal had expected.
The unemployment rate, based on a separate survey of US households, fell to 4.1% from 4.2%.
Revisions to labour force data also showed that hiring in previous months was stronger than thought, with the total number of jobs added in April and May topping a combined 16,000 more than estimated.
The two-year US Treasury yield (which moves with interest rate expectations and inversely to prices) increased 0.09 percentage points to 3.87 per cent. Stock futures also rose after the report, the FT reported. Trading on Thursday will end at 1pm ahead of the US’ Independence day holiday.
The context: A boost in public education and state and local government hiring helped to push growth in June, while healthcare also continued adding jobs. Federal-government cuts were a slight drag on the data, as federal-government employment declined by 7,000 in June. Overall government employment however rose by 73,000, as states and localities continued to add jobs.
Attention will now turn to the Federal Reserve, as investors are scaling back their bets on interest rate cuts. Despite the President repeatedly calling for the central bank to cut rates, earlier this week Fed Chair Jerome Powell said the central bank would take a wait and see approach to gauge how tariffs are affecting prices and employment before cutting rates.
“We’re simply taking some time,” Powell said. “As long as the US economy is in solid shape, we think the prudent thing to do is wait and learn more and see what those effects might be.”
The sources: Bureau of Labor Statistics, WSJ, Bloomberg, FT
