Jobs Report: US Economy Adds 1,47,000 Jobs In June, Unemployment Rate Down To 4.1%

(MENAFN- Live Mint) The U.S. economy added a robust 147,000 jobs in June, beating expectations of just 110,000 hires and surprising experts who predicted a slowdown. Unemployment unexpectedly fell to 4.1%, the lowest since February, despite forecasts of a rise to 4.3%, according to an AP report.

Unemployment dips as hiring beats forecasts

Labor Department revisions added 16,000 more jobs to April and May's totals, painting a healthier picture of recent hiring. Stock markets rose and Treasury yields jumped after the news, as traders bet the strong data gives the Federal Reserve room to delay interest rate cuts. Wage increases also cooled slightly, rising just 0.2% monthly and 3.7% annually, easing inflation worries.
Government hiring drove nearly half of June's job growth, adding 73,000 positions thanks to state and local education roles. Healthcare contributed another 39,000 jobs, while social assistance added 19,000.

However, federal employment shrank by 7,000, part of a 69,000 reduction since January, reflecting cuts from Trump's new Department of Government Efficiency.

Manufacturers shed 7,000 jobs, signaling ongoing trade-related stress. While payrolls grew, the labor force shrank by 130,000 people as participation fell to 62.3%, its lowest since 2022. This decline helped push unemployment down, masking underlying strains.

Fed rate cuts pushed back as labor market shows resilience

The jobs surprise slashed odds of a July Federal Reserve rate cut from 24% to under 5%, with markets now eyeing September for potential easing. Fed Chair Jerome Powell had already signaled caution, noting tariffs could fuel inflation and limit growth. While President Trump demanded immediate rate reductions, the resilient labor data supports the Fed's wait-and-see stance.

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Despite Trump's trade policies causing business uncertainty, hiring has held steady, though ADP's earlier report of private-sector job losses hinted at fragility. Economists warn tariffs risk“stagflation”, higher prices plus slower growth, but for now, the job market remains a bright spot.

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