Sharp miss on expectations
U.S. employers added just 57,000 jobs in June, far below the 100,000 new hires that economists had forecast. The unemployment rate edged down to 4.2%, but the weak headline number suggests the labor market is cooling more rapidly than anticipated. Private payrolls also disappointed, rising by 98,000 according to ADP, below expectations.
Factory sector sheds jobs
Factory job cuts in June neared levels seen during the financial crisis and the COVID-19 pandemic, according to S&P data. The manufacturing sector continues to struggle under the weight of high interest rates and global trade uncertainty. Long-term unemployment is also rising, with more workers finding it difficult to re-enter the workforce after losing their jobs.
Markets react to slowing growth
Investors reacted to the weak jobs report with concern, as the data arrives amid persistent inflation that ran at 4.2% annually in May. The Federal Reserve, now led by Chairman Kevin Warsh, faces a delicate balancing act — attempting to control inflation without pushing the economy into recession. The June jobs data may reinforce calls for the Fed to consider rate cuts later this year.