The June jobs report showed the US labor market remained more resilient than anticipated in the final month of the second quarter.
The US economy added 147,000 nonfarm payrolls in June, more than the 106,000 expected by economists. The unemployment rate unexpectedly fell to 4.1%. Economists had expected the unemployment rate to move higher to 4.3%.
In May, the US economy added 144,000 jobs while the unemployment held flat at 4.2%. Those figures were revised higher on Friday from a previously reported 139,000 job additions in May.
“You’re just not seeing any feed through from tariff or trade related stress,” RSM chief economist Joe Brusuelas told Yahoo Finance. “We got an absolutely solid payroll number.”
Brusuelas added, “This feeds right into the forecast of a slowing but solid economy.”
Average hourly earnings in June rose 0.2% over last month and 3.7% over the prior year. Economists expected wages to rise 0.3% over last month and 3.8% over the prior year. Meanwhile, labor force participation rate fell to 62.3% from 62.4% the month prior.
Government employment rose by 73,000 workers in June, accounting for roughly half of the month’s gains.
“The risk going forward is that slower labor force growth keeps the unemployment rate low even as the number of unemployed rises,” Oxford Economics lead US economist Nancy Vanden Houten wrote in a note to clients on Thursday.
Following the report, increasing bets on a July interest rate cut from the Federal Reserve reversed. Markets are now pricing in just a 5% chance the central bank lowers rates at its July meeting, down from a 24% chance seen a day prior, per the CME FedWatch Tool. Traders also grew more skeptical of a September move from the Fed, with markets now pricing in a 78% chance the Fed cuts by the end of its September meeting, down from a 94% chance seen a day prior.
“Today’s data make a rate cut at the July FOMC meeting quite unlikely, in our view,” Wells Fargo senior economist Sarah House wrote in a note to clients on Friday.
The release comes as signs of cooling in the job market have continued to emerge in recent data. On Wednesday, ADP data showed private employers unexpectedly cut 33,000 jobs in June. This marked the first month of job losses in the private sector since March 2023. Meanwhile, continuing filings for unemployment benefits recently hit their highest level in nearly four years.
But the data has yet to indicate a significant, broad-based slowdown in the labor market. On Tuesday, the May Job Openings and Labor Turnover Survey (JOLTS) showed job openings ended May at their highest level since November 2024. The release also showed that quits and hiring rates remained near decade lows.
