U.S. Adds 147,000 Jobs in June – Unemployment Falls to 4.1%

What to Know

• The U.S. added 147,000 nonfarm payroll jobs in June, beating the expected 110,000.
• The unemployment rate unexpectedly dropped to 4.1% instead of rising to 4.3% as forecast.
• Bitcoin dipped to $109,500 after the report but remains above $109,000.
• Strong job numbers may reduce the likelihood of a July rate cut by the Federal Reserve.
• Markets now focus on the September Fed meeting for possible rate moves.

U.S. Labor Market Outpaces Forecasts

The American labor market showed unexpected strength in June, with new government data revealing that 147,000 jobs were added last month. This figure easily topped consensus expectations of 110,000 jobs, offering fresh evidence that the economy continues to hold steady despite mixed signals from other sectors.

The report, released by the Bureau of Labor Statistics a day earlier than usual due to the July 4 holiday, also showed that job growth for May was revised slightly upward to 144,000 from an initial estimate of 139,000.

Unemployment Rate Falls Instead of Rising

In a surprising twist, the unemployment rate slipped to 4.1% for June. Analysts had broadly expected a slight uptick to 4.3% from May’s 4.2%, but the data proved otherwise, underscoring that employers are still actively hiring and labor demand remains resilient.

These numbers support the view that the U.S. labor market remains one of the strongest pillars of the economy, which could complicate calls for the Federal Reserve to move quickly on interest rate cuts.

Average Hourly Earnings Show Modest Growth

Wage growth cooled slightly last month, with average hourly earnings climbing 0.2% in June. This was a touch below the expected 0.3% and down from 0.4% in May. On an annual basis, wages rose by 3.7%, also missing forecasts of 3.9% and down from the previous 3.8% reading.

Slower wage growth may help ease inflation concerns somewhat, but the robust jobs total means the Fed could stay cautious about shifting policy too soon.

Market Reaction: Stocks Up, Bitcoin Slips

Markets responded swiftly after the report hit the wires. U.S. stock index futures edged higher, with the S&P 500 and Nasdaq 100 both up by about 0.3% in early trading. The yield on the 10-year Treasury note spiked nine basis points to 4.36% as traders dialed back bets on imminent monetary easing.

Meanwhile, Bitcoin (BTC), which had surged past $110,000 earlier in the week, slipped slightly to around $109,500 following the stronger-than-expected labor data. The crypto market has been sensitive to Fed policy signals, as higher interest rates typically weigh on riskier assets.

Fed Rate Cut Odds Shift After Jobs Data

Before the jobs report, traders had been betting heavily that the Federal Reserve would likely stand pat at its late-July policy meeting. Data from CME’s FedWatch tool indicated around a 75% chance the central bank would hold rates steady.

After the release, any lingering speculation about a possible July cut has mostly evaporated. Attention now shifts to the Fed’s September meeting, where the odds of at least one rate cut remain high at about 95%, as traders expect inflationary pressures to ease later in the year.

Federal Reserve Chair Jerome Powell has repeatedly emphasized that the central bank will stay patient and data-dependent, a position that has often clashed with President Trump’s calls for immediate and aggressive cuts to stimulate growth ahead of the election cycle.

Strong Jobs Data Complicates Fed’s Path

While economic growth has shown some signs of slowing, the resilient labor market makes it harder for the Fed to justify immediate policy easing. The latest data suggests that the U.S. economy is still producing enough new jobs to maintain consumer spending and overall growth, at least for now.

If upcoming inflation readings continue to trend lower alongside cooling wage gains, however, the central bank could still be persuaded to trim rates before year-end to cushion the economy against broader global headwinds and potential trade risks.

What to Watch Next

Looking ahead, investors will focus on the next inflation report, due out mid-July, for clues on whether price pressures are easing fast enough to give the Fed more confidence to cut rates. The Federal Open Market Committee’s next meeting in late July is now widely expected to leave rates unchanged, but September could bring a different outcome if inflation subsides further and wage growth remains tame.

In the meantime, the crypto and equities markets will keep reacting to each new data point as traders adjust their bets on when — or even if — the Fed will pivot to easier policy this year.

Bottom Line

June’s strong U.S. employment report shows that the labor market remains a bright spot in an otherwise mixed economic landscape. With the unemployment rate dipping to 4.1% and job growth beating forecasts, the Fed has more reason to wait before cutting interest rates. Investors and traders should stay tuned for upcoming inflation data and any fresh Fed commentary that could shift expectations yet again.

FAQ

How many jobs did the U.S. add in June?

The U.S. added 147,000 nonfarm payroll jobs in June, topping expectations of 110,000.

What is the current U.S. unemployment rate?

The unemployment rate fell to 4.1% in June, beating forecasts for a slight increase.

How did the markets react to the report?

Stock index futures rose modestly while Bitcoin dipped slightly, reflecting bets that the Fed will stay patient with rate cuts.

Will the Federal Reserve cut rates in July?

Given the stronger labor market, the chances of a July rate cut now look slim. Focus has shifted to the September meeting for possible easing.

Where can I get more market forecasts?

Click here for more forecasts and updates.

Read more: How the Federal Reserve’s Rate Cuts Impact Bitcoin and the Broader Cryptocurrency Market