Strong June Jobs Data Lowers Odds of July Fed Rate Cut
A robust U.S. employment report for June has made it less likely the Federal Reserve will cut interest rates this month.
The Bureau of Labor Statistics announced on Thursday that nonfarm payrolls grew by 147,000 in June, beating forecasts that called for a gain of 110,000 jobs. This figure also edged higher than May’s revised total of 144,000, which was previously estimated at 139,000.
The unemployment rate dropped to 4.1% in June, coming in below the expected 4.3% and down from May’s 4.2%.
Bitcoin
BTC
$1,07,993.29
dipped modestly after the data was released, slipping to just under $109,000. The cryptocurrency had recently been on an upward trajectory, briefly surpassing $110,000 to reach its highest level in around a month.
U.S. equity futures responded positively to the labor report, with the Nasdaq 100 and S&P 500 each rising by approximately 0.3%. Meanwhile, the yield on the 10-year Treasury note surged nine basis points to 4.36%.
Investors have been watching economic indicators closely to gauge the Fed’s policy path. Although some central bank officials have floated the idea of a rate cut as early as July, Fed Chair Jerome Powell has consistently emphasized that the economy remains strong enough to delay such action.
Powell’s cautious stance has clashed with President Trump’s repeated calls for aggressive rate cuts.
Before Thursday’s jobs release, traders placed about a 75% probability on the Fed keeping rates steady at its late-July meeting, according to CME FedWatch data. For September, markets had priced in a 95% chance of at least one 25-basis-point cut.
However, following the jobs report, those probabilities shifted: the chance of a July rate hold increased to 95%, while the likelihood of a September cut fell to 78%.
Other details from the report showed that average hourly earnings rose by 0.2% in June, below the forecasted 0.3% increase and down from May’s 0.4% gain. On an annual basis, wages were up 3.7%, slightly under expectations of 3.9% and softer than May’s 3.8% pace.
The employment figures were released a day early due to the July 4 holiday. Both the NYSE and Nasdaq were scheduled to close early at 1 p.m. ET on Thursday, with bond markets closing at 2 p.m. ET. All U.S. markets will be shut on Friday.
In separate data released Thursday, weekly initial jobless claims fell to 233,000 from 237,000 the previous week, beating expectations of 240,000 and signaling resilience in the labor market.
