The U.S. job market showed some strength in June, according to the latest report from the U.S. Bureau of Labor Statistics. The report revealed that 206,000 jobs were added in June, slightly lower than the revised 218,000 jobs added in May. Despite this slight decrease, the number of jobs added exceeded economist estimates of 190,000.
However, the unemployment rate in June rose to 4.1%, up from 4.0% in May. This increase was higher than the forecasted 4.0% unemployment rate. Average hourly earnings also saw a slight increase of 0.3% in June, compared to the expected 0.3%. On a year-over-year basis, average hourly earnings were up by 3.9%, slightly lower than the previous month’s 4.1%.
Following the release of the job report, the price of bitcoin (BTC) experienced a minor dip to $55,300. This drop was insignificant considering the recent 10% crash in the bitcoin market due to various factors such as Mt. Gox repayments and German government sales.
Before the data was released, traders had little expectation of a rate cut by the U.S. Federal Reserve at the July 31 meeting. However, there is now a more than 70% probability of lower rates at the mid-September meeting, according to the CME FedWatch tool. Federal Reserve Chair Jerome Powell hinted at a possible rate cut this week, highlighting concerns about a weaker job market outweighing worries about inflation.
While the headline number of 206,000 jobs added in June exceeded expectations, other data points to some weaknesses in the job market. May’s job gain was revised down, and April’s originally reported job gain was also revised lower. When looking at the past three months together, the average job gain was 177,000, significantly lower than the previous quarter’s 249,000 average job gain.
Moreover, despite the modest increase, the unemployment rate of 4.1% in June is the highest level since November 2021. In response to the job report, U.S. stock index futures saw a slight increase, and the 10-year Treasury yield dropped by five basis points to 4.31%.
Overall, while the job market in the U.S. showed some signs of strength in June, there are underlying weaknesses that could impact future decisions by the Federal Reserve regarding monetary policy. As investors and analysts continue to monitor economic indicators, the path forward remains uncertain.