The U.S. labor market showed stronger-than-expected resilience in June, with nonfarm payrolls rising by 147,000, surpassing economist forecasts of 110,000. The figure also edged above May’s revised 144,000, while April was revised upward to 158,000, according to data from the Bureau of Labor Statistics.
The biggest contributor to June’s job gains was the government sector, which added 73,000 jobs, primarily from state and local hiring. While private sector hiring remained modest, the overall gains point to continued strength in a cooling yet stable labor market.
Markets reacted swiftly to the report. Traders significantly reduced expectations of a July interest rate cut, as the data weakens the case for immediate monetary easing. While inflation remains a concern, the Federal Reserve is likely to interpret this jobs data as a sign that the economy is not softening fast enough to justify urgent intervention.
Why it matters
Job reports are a key driver of U.S. monetary policy. Stronger-than-expected hiring reduces the urgency for the Fed to cut rates, which could keep borrowing costs elevated longer. This impacts everything from stock market sentiment to mortgage rates and signals the Fed may stay cautious despite previous market optimism.
