Stronger-Than-Expected U.S. June Jobs Data: 147K Positions Gained, Unemployment Falls to 4.1%.

Solid June Job Gains Diminish Prospects for Fed Rate Cut in July

A strong June jobs report has reduced expectations that the Federal Reserve will lower interest rates this month.

The U.S. Bureau of Labor Statistics said Thursday that nonfarm payrolls rose by 147,000 in June, surpassing the forecast of 110,000. The figure also edged above May’s revised total of 144,000, which had initially been reported as 139,000.

The unemployment rate dropped to 4.1% in June, better than the anticipated 4.3% and down slightly from 4.2% in May.

Bitcoin
BTC

$1,07,993.29
slipped to just below $109,000 following the jobs release. The cryptocurrency had been trending higher leading up to the report, briefly exceeding $110,000 to reach its strongest level in about a month.

U.S. stock futures climbed after the labor data, with gains of roughly 0.3% for both the Nasdaq 100 and S&P 500. Meanwhile, the yield on the 10-year Treasury note jumped nine basis points to 4.36%.

Investors are paying close attention to economic reports for clues about the Fed’s next moves. While some central bank officials have hinted at a possible rate cut in July, Fed Chair Jerome Powell has stressed that the economy is strong enough to allow the Fed to wait before adjusting rates.

Powell’s cautious approach has contrasted sharply with President Trump’s calls for immediate, deep rate cuts.

Prior to Thursday’s data, markets assigned about a 75% probability that the Fed would hold rates steady at its July meeting, according to CME FedWatch data. For September, the odds of at least one 25-basis-point rate cut were 95%.

However, the stronger-than-expected jobs numbers shifted sentiment quickly. Within 15 minutes of the report, the chance of the Fed holding rates in July rose to 95%, while the odds of a September cut dipped to 78%.

Average hourly wages climbed 0.2% in June, falling short of the expected 0.3% increase and slower than May’s 0.4% gain. On a yearly basis, wages were up 3.7%, slightly under projections of 3.9% and lower than May’s 3.8% pace.

The jobs data was released a day earlier than usual because of the July 4 holiday. The NYSE and Nasdaq planned early closes at 1 p.m. ET on Thursday, with bond markets shutting at 2 p.m. ET. U.S. markets will be closed Friday.

In other economic news Thursday, initial jobless claims dropped to 233,000 from 237,000 the previous week, outperforming forecasts of 240,000 and indicating ongoing labor market strength.