The US labor market added more jobs than expected in June while the unemployment rate unexpectedly rose, reaching its highest level since November 2021 in another sign the job market continues to cool.
Data from the Bureau of Labor Statistics released Friday showed the US economy market added 206,000 nonfarm payroll jobs in June, more than the 190,000 expected by economists.
The unemployment rate rose to 4.1%, up from 4% in the month prior and the highest reading in almost three years. June’s job additions were a slight decline from May, which saw job gains revised down on Friday to 218,000 from the 272,000 initially reported last month.
Stock futures turned higher following the report, adding to gains after the market traded to record highs earlier this week amid a slew of softer-than-expected economic data, including readings on inflation that have the US pacing back toward a “disinflationary path,” according to Federal Reserve Chair Jerome Powell.
Ahead of Friday’s jobs report, investors were pricing in two interest rate cuts this year, with the first most likely to come in September.
According to the CME FedWatch Tool, investors are pricing in a nearly 75% chance the Fed cuts rates in September. Last month, Fed forecasts suggested one rate cut would likely be appropriate this year.
Wage growth, an important measure for gauging inflation pressures, slowed to 3.9% year-over-year. On a monthly basis, wages increased 0.3%, a decrease from the previous month’s 0.4% gain.
Also in Friday’s report, the labor force participation rate picked up to to 62.6% from 62.5% the month prior.
The largest job increases in Friday’s report were in government employment, which added 70,000 jobs in June. Meanwhile, healthcare employment added 49,000 jobs, lower than the average monthly gain of 64,000 over the last twelve months.
This is breaking news. More to come …
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
Click here for in-depth analysis of the latest stock market news and events moving stock prices.
Read the latest financial and business news from Yahoo Finance
