Instant view: US job growth beats expectations in June
NEW YORK (Reuters) -U.S. job growth in June rose above expectations, while the unemployment rate fell, suggesting the labor market is stable.
Nonfarm payrolls increased by 147,000 jobs in June, after rising 144,000 in May, the Labor Department showed on Thursday. Economists polled by Reuters had forecast 110,000 jobs added last month.
The unemployment rate fell to 4.1% in June from 4.2% in the previous month.
On Wednesday, the ADP National Employment Report showed private payrolls unexpectedly fell in June, the first drop in more than two years.
MARKET REACTION
STOCKS: S&P E-minis gained and were up 0.18%
BONDS: The yield on benchmark U.S. 10-year notesrose 6.7 basis points at 4.359% and the two-year note yield climbed 12 basis points to 3.902%
FOREX: The dollar advanced against major currency pairs
COMMENTS:
PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK:
“Unemployment ticking down is also a surprise. The good news here is that hourly wages certainly are not getting out of hand. They’re subdued at 0.2% and cooler than expected on a yearly basis.”
“The same participation rate is down, but I wouldn’t put too much into reading too much into that.”
“The report just shows that the labor market is still producing jobs notwithstanding the tariff uncertainties.”
“Apparently, the government has called back some of those laid off employees. Without government jobs, payrolls would have been anemic.”
“That takes us back to a September rate cut. On the other hand, if inflation should pop up from the tariffs, then they would probably go even out further and wait for December. But things but things staying the way they are now, I think we’ll get a rate cut in September. But I certainly rule out July.”
BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN:
“It’s nice to go into a holiday with a beat on the headline payroll number and wage gains positive, but moderate. The large increase in the number of discouraged workers is disappointing. This is after a sharp increase in job openings, so there’s a disconnect between employers and potential employees that needs to be resolved. Those who have been without work the longest are also those having the hardest time finding work. With the diffusion index below 50, job gains are unfortunately narrowing.”
DAVID LAUT, CHIEF INVESTMENT OFFICER, ABOUND FINANCIAL, GRANITE BAY, CALIFORNIA:
“Thursday’s jobs report was stronger than expected, which shows that the resiliency we have been seeing in the economy over the past several months is still intact. We still expect the Federal Reserve to continue its wait and see approach on interest rates, pushing any potential rate cuts into the fourth quarter of this year.”
(Compiled by the Global Finance & Markets Breaking News team)
