JUNE JOBS BOOM; RECORD EMPLOYED; RATE CUT OFF? STOCKS SPOOKED

Strong job growth is back: Payrolls jump in June well above expectations

  • Nonfarm payrolls rose 224,000 in June, well above market expectations of 165,000, according to the Labor Department.
  • The unemployment rate edged higher to 3.7% but was still near 50-year lows.
  • Wage growth was 3.1% year over year, one-tenth of a point below market expectations.
  • Stocks opened lower on the news and government bond yields surged.

ayroll growth rebounded sharply in June as the U.S. economy added 224,000 jobs, the best gain since January and running contrary to worries that both the employment picture and overall growth picture were beginning to weaken. The unemployment rate edged up to 3.7% as labor force participation rose, according to the Labor Department.

Economists surveyed by Dow Jones had expected nonfarm payrolls to rise by 165,000 and the unemployment rate to hold steady at 3.6%. May’s initially reported growth of 75,000 had raised doubts about the durability of the record-setting expansion that began a decade ago. The May count was revised lower to 72,000.

Federal Reserve policymakers have been watching the jobs numbers closely.

Markets have been widely anticipating that the central bank will cut its benchmark interest rate later this month, regardless of what the June payrolls count showed.

 

(CNSNews.com) – After the Fourth of July fireworks, the fifth of July brings another reason for Americans to celebrate.

A record 157,005,000 people were employed in June, the most since February and the 19th record of Trump’s presidency, the Bureau of Labor Statistics reported  on Friday.

And the economy added a strong 224,000 jobs in June, well above the estimate of 160,000.

The unemployment rate, the lowest in 50 years, ticked up a tenth of a point to 3.7 percent.

In June, the nation’s civilian noninstitutionalized population, consisting of all people age 16 or older who were not in the military or an institution, reached 259,037,000. Of those, 162,981,000 participated in the labor force by either holding a job or actively seeking one.

The 162,981,000 who participated in the labor force equaled 62.9 percent of the 259,037,000 civilian noninstitutionalized population. That’s up a tenth of a point from May’s 62.8 percent participation rate. The payroll taxes paid by people who participate in the labor force help support those who do not participate, so the higher this number, the better.

The participation rate reached a record high of 67.3 percent in early 2000; the highest it’s been under Trump is 63.2 percent.

 

Strong U.S. Hiring Rebound Dilutes Case for Larger Fed Cut

Against a backdrop of subdued inflationary pressures, the wage and unemployment-rate data keep open the possibility of a quarter-point cut in the Fed’s benchmark interest rate, either at the end of this month or later. Traders trimmed bets on rate reductions after the report though still see a 25-basis-point cut in July, and President Donald Trump’s top economic adviser kept pressure on the central bank to act.

“We’ve always seen a more notable deceleration in employment ahead of a cut,” said Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, who projected a 205,000 gain in June payrolls. “I’m not as convinced as the market that the Fed has to move in July. Rate cuts are likely coming but the Fed has to be very careful to not be seen as pushed by the market and the White House.”

Trump tweeted “JOBS, JOBS, JOBS!” after the report and has repeatedly boasted that the world’s largest economy is in the best shape ever. Despite that, he’s made repeated calls for Fed Chairman Jerome Powell to cut interest rates as the record expansion shows other signs of slowing — just as the 2020 campaign begins.

Dow drops 200 points after strong jobs report dampens hope of a Fed rate cut

Stocks fell on Friday after the release of stronger jobs data dampened hope for easier Federal Reserve monetary policy.

The Dow Jones Industrial Average dropped 200 points, while the S&P 500 lost 0.8%. The Nasdaq Composite also slid 0.9% as semiconductor stocks fell broadly.

The U.S. economy added 224,000 jobs in June. Economists had forecast the U.S. added 165,000 jobs in June, after a stunningly low 75,000 jobs were created in May, according to Dow Jones.