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Strong June Jobs Report Pushes Fed to Postpone Rate Cuts

Robust headline job gains veiled private payroll weakness, prompting markets to shift prospects for Fed rate cuts into the fall.

The Federal Reserve Building in Washington, D.C. (Dreamstime/Dreamstime/TNS)
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Overview

  • U.S. employers added 147,000 jobs in June and the unemployment rate fell to 4.1%, surpassing economists’ estimates, according to the Bureau of Labor Statistics.
  • Private‐sector payrolls rose at their slowest pace since last October, revealing underlying labor‐market deterioration beneath the headline numbers.
  • Treasury yields climbed and the dollar strengthened after traders pared the odds of a July rate cut to about 5% and repriced the first easing for September.
  • Fed officials including Atlanta’s Raphael Bostic argued that widespread uncertainty and a still‐solid economy warrant holding rates steady at the upcoming meeting.
  • Global indicators—from Asia’s manufacturing contraction to Europe’s inflation settling at target—underscore the data‐dependent approach shaping the Fed’s fall policy outlook.