The US added 147,000 jobs in June, exceeding expectations, and unemployment unexpectedly cooled to 4.1%.
Economists expected job growth of 111,000 and for unemployment to increase from 4.2%, which it had been for three consecutive months, to 4.3%.
The Fed decided about two weeks ago to hold interest rates steady again. Federal Reserve Chair Jerome Powell said on June 18, after the rate announcement, that the job market is solid, with low unemployment and moderating wage growth that exceeds inflation.
The next rate decision will be toward the end of July. New inflation data and other measures will be released before the members determine what to do next with interest rates. CME FedWatch, which shows the chance of a rate outcome based on market moves, indicated after Thursday’s release a 95% chance that rates will be held steady again, up from a 75% chance before the report. Powell has repeatedly said President Donald Trump’s tariffs have been one reason rates haven’t come down yet.
“We went on hold when we saw the size of the tariffs, and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs,” Powell said at a European Central Bank panel earlier this week.
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He added that the “prudent thing to do is to wait and learn more and see what those effects might be” before reacting, as long as the economy is solid.
While the job market has shown some strength, it has been unfavorable for job seekers, and it can be tough for recent college graduates to get hired easily. Just 29% of consumers surveyed by The Conference Board said jobs were “plentiful” in June.
“So far, layoffs have not surged wildly, but hiring has cooled,” Mark Hamrick, senior economic analyst for Bankrate, told Business Insider toward the end of June. “The outlook is for more of this in the coming months.”
Softer spending and a worse-than-expected real GDP reading show there are economic headwinds, but the US isn’t officially in a recession.
This is a developing story. Please check back for updates.
