Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

U.S. Job Creation Surges, Denting Rate Cut Hopes

Published 07/05/2019, 08:34 AM
Updated 07/05/2019, 09:45 AM
© Reuters.

© Reuters.

Investing.com - The U.S. economy created many more jobs than expected in June, putting a dent in the case for an immediate interest rate cut from the Federal Reserve.

Official government data released on Friday also showed an unexpected, but modest, increase in the unemployment rate, while annual wage inflation held steady. Overall, that's a brighter picture than recent indicators from the manufacturing and housing sectors have painted, but market reaction suggested that there is still widespread belief that the Fed will cut rates when its policy-making committee meets later this month.

Nonfarm payrolls (NFP) rose by 224,000 in June, well above consensus expectations for 160,000 and a sharp rebound from a downwardly-revised 72,000 in May.

The jobless rate unexpectedly rose to 3.7%. Consensus had expected it to remain unchanged at 3.6%, which was the lowest level since December 1969.

Wage inflation grew 3.1% on an annualized basis, holding steady at the prior month’s reading. Consensus had expected an increase to 3.2%.

Markets have convinced themselves that the Fed will soon begin easing policy for the first time in a decade: interest rate futures suggest a quarter-point cut at the July 30-31 meeting is certain, and that there will be three such cuts in total by the end of the year, driven by the need to offset the damage caused by the U.S.'s trade dispute with China.

The data did little to change that conviction. Marc Chandler, managing director of Bannockburn Global Forex, said they merely "keep in check" talk of a half-point rate cut.

U.S. futures extended losses slightly following the release with S&P 500 futures down 0.3% compared to a drop of 0.2% beforehand.

The U.S. dollar index, which measures the greenback against a basket of major currencies, extended gains and was up 0.4% at 96.745, compared to 96.537 immediately ahead of the release.

The benchmark 10-year Treasury yield rose sharply to 2.04%, compared to 1.97% before the publication.

Latest comments

Keep Winning
Great news
trump will never see his 27K
I don't understand how unemployment rates could be up when job creation numbers are up. There is also only a 0.1% increase in participation rate. The numbers just don't make sense.
You said it yourself.. Workforce participation. Also, immigration and new college grads looking for work
Buy or Sell?
use ETF or something similar. never believe brokers
This data is a joke. It will be revised down by 200k within six months.
The forecasts for all of 2019 look to be very low to make the actual numbers look great. hmmmm
And Trump doesn't understand economics just wants the cut to make himself look good.
Markets will drop as the expected rate cut disappears. Markets should never of had that expectation as there is no certain clear cut decline indicated for the economy.
this is not good
why is a strong economy not good?
The Fed could use this data to not lower interest rates as expected. It will be interesting to see how the market reacts.
Employment is one of the biggest casualties of right wing governments!
Missed again on consensus estimates, typical poor job.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.