03.07.2025 14:18

June's employment figures surprised analysts, revealing a stronger-than-anticipated job market that significantly reduces the likelihood of an interest rate cut in July. The Bureau of Labor Statistics reported a seasonally adjusted increase of 147,000 nonfarm payrolls, exceeding the projected 110,000 and slightly surpassing May's revised figure of 144,000. This positive momentum continued upward revisions for April, now standing at 158,000.


Government hiring fueled much of this growth, showcasing the surprising resilience of the labor market. Consequently, the unemployment rate dipped to a four-month low of 4.1%, defying predictions of a rise to 4.3%. A broader measure, incorporating discouraged workers and underemployed individuals, also fell to 7.7%, reaching its lowest point since January. However, this improvement stemmed partially from a reduction in the overall labor force.


This decrease in the labor force participation rate is noteworthy. It fell to 62.3%, its lowest level since late 2022, reflecting a substantial increase of 329,000 individuals outside the workforce. The household survey, used to calculate the unemployment rate, indicated a more modest employment increase of only 93,000 jobs. Furthermore, the number of individuals not actively seeking employment soared by 234,000, reaching a total of 1.8 million.


The market reacted positively to this news. Stock prices climbed, while Treasury yields saw a sharp increase. This robust performance occurred during a shortened trading day in anticipation of the U.S. Independence Day holiday. Interestingly, June's job growth mirrored the year-to-date average of approximately 146,000 new jobs. Market experts, such as Jeff Schulze, head of economic and market strategy at ClearBridge Investments, interpreted the results decisively: the strong June job numbers effectively eliminate the possibility of a rate cut in July.