The U.S. employment picture was far stronger than forecast in June, furthering Federal Reserve Chairman Jerome Powell’s insistence on remaining patient with respect to easing monetary policy.
Nonfarm payrolls grew 147,000 last month, according to a report Thursday from the Bureau of Labor Statistics. Economist forecasts had predicted job growth of only 110,000, marking a modest increase from May’s job growth of 144,000 (revised from an originally reported 139,000).
The unemployment rate for June was recorded at 4.1%, better than the anticipated 4.3% and a slight improvement from May’s rate of 4.2%.
In the minutes following the report’s release, the price of bitcoin (BTC) dipped modestly to just under $109,000, after having seen a steady climb leading up to the report and briefly topping $110,000 for the first time in about a month.
In response to the economic data, U.S. stock index futures displayed incremental gains, with the Nasdaq 100 and S&P 500 both up by approximately 0.3%. Additionally, the 10-year Treasury yield experienced a notable jump of nine basis points, reaching 4.36%.
Market participants are closely monitoring economic indicators for signals about the Federal Reserve’s next steps. Despite some speculation among certain Fed officials regarding a possible rate cut in July, Chairman Jerome Powell has consistently maintained that the economy remains robust enough to allow the central bank to adopt a patient stance in its monetary policy considerations.
This approach has placed Powell in direct contrast with President Trump, who has been vocally advocating for immediate and substantial rate cuts.
Before the Thursday morning data was released, traders had estimated a 75% probability that the Fed would maintain its current rates in its next meeting scheduled for late July. However, the likelihood of a rate cut in September is markedly higher, with traders pricing in a 95% chance of at least one 25 basis point cut.
Fifteen minutes after the employment news broke, the odds of holding steady in July surged to 95%, while expectations for a September cut dwindled to 78%.
In analyzing other details from the report, average hourly earnings showed a growth of 0.2% in June, falling short of the anticipated 0.3%. Year-over-year, average hourly earnings increased by 3.7%, slightly below forecasts of 3.9% and May’s 3.8%.
This employment report was issued a day earlier than usual because of the upcoming July 4 holiday weekend, during which the NYSE and Nasdaq are set to close at 1 p.m. ET, and bond markets at 2 p.m. ET on Thursday. All U.S. financial markets will be closed on Friday.
Furthermore, weekly initial jobless claims released on the same Thursday also indicated positive strength, decreasing to 233,000, down from the previous week’s 237,000 and below forecasts of 240,000.
