The June jobs report showed that hiring slightly exceeded expectations, as employers added 206,000 payroll positions, but prior months’ job growth was revised lower. The unemployment topped 4% for the first time since late 2021, while wage growth hit a three-year low. After the jobs report, S&P 500 futures were little changed despite the positive implications for the Federal Reserve rate-cut outlook.
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This Is How The Jobs Report Data Influences The Fed And Interest Rates
Jobs Report Hits And Misses
The 206,000 overall employment gain topped economists’ 189,000 forecast, according to Econoday. Private-sector employers added just 136,000 jobs, missing forecasts for 160,000. Government jobs rose by 70,000.
Hiring gains in April and May were revised down by a combined 111,000 jobs.
Average hourly earnings rose 0.3% in June, matching estimates. Twelve-month wage growth of 3.9% also matched forecasts
This story is being updated with more data and analysis. Please check back.
Household Survey
The headline job and wage figures come from the Labor Department’s monthly survey of employers. The separate household survey details labor force participation, work status and the unemployment rate.
The household survey comes with a higher margin of error than the employer responses, so monthly changes should be taken with a grain of salt. However, the household survey has been known to lead the employer survey at economic turning points, so it shouldn’t be ignored.
The rise in unemployment to 4.1% defied predictions of a steady 4% rate.
Fed Rate Cut Odds
Ahead of the June jobs report, markets were pricing in 73% odds of a rate cut by the Sept. 18 Fed meeting, according to CME Group’s FedWatch page. Markets saw 70% odds of two quarter-point Fed rate cuts by the year’s final meeting on Dec. 18.
Fed chair Jerome Powell said this week that solid job growth won’t prevent Fed rate cuts, but policymakers will pivot faster if hiring weakens.
S&P 500
S&P 500 futures were little changed after the jobs report in early Friday stock market action. Treasury yields fell slightly to about 4.3%.
Ahead of the July 4 holiday, the S&P 500 rose 0.4% amid softer economic data. That marked the 33rd record close this year for the S&P 500, which is up 16.1% so far in 2024.
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