US non-farm payrolls up by 224,000 in June
The US June jobs report smashes expectations after lackluster May non-farm payrolls statistics.
US non-farm payrolls grew by 224,000 in June, according to the US Department of Labour. That number far surpasses the disappointing 75,000 jobs added in May. Though the unemployment rate ticked slightly upward to 3.7%, it's still the lowest rate in almost 50 years. The new non-farm payrolls report shows the highest job gain since January.
US non-farm payrolls:key figures
|Professional and business services||+51,000|
Where did non-farm payrolls grow in June?
Professional and business services added 51,000 jobs in June. The healthcare industry added 35,000 new payrolls. Even manufacturing jobs grew by 17,000 last month despite the US-China trade impasse affecting the industry. The only sector that had negative news was retail as 6000 jobs were lost in June.
What do financial experts say about the June non-farm payrolls?
Martha Gimbel, director of economic research for the Indeed Hiring Lab, believes that the positive jobs report shows the resilience of the US economy.
‘The jobs growth number this month is comforting after a few months of uncertainty. While job growth may be slowing down from its astonishing rate last year, it’s reassuring that the economy is still creating jobs at a reasonable pace,’ said Gimbel.
While the amount of jobs are growing, wages haven’t kept pace. Hourly wages grew by 0.2%, less than the expected 0.3%. Jason Guggisberg, vice-president of staffing firm Adecco, encourages corporations to raise wages, but some companies are unsure about how long the economic boom will last.
‘That wage conversation has been going on for years now. They've [employers] been dragging their feet, waiting to see what happens. The answer's always, “it's not in the budget,” said Guggisberg.
Will good June non-farm payrolls be bad for Fed rate cuts?
Ironically, the good news about June non-farm payrolls could be bad news for financial experts wanting a US Federal Reserve interest rate cut. While Fed chair, Jerome Powell, vowed to act to help the US economic expansion, the better-than-expected jobs report could mean the Fed won't feel an urgency to reduce rates.
Gregory Faranello, head of Amerivet Securities’ US rates, said that a half-point rate cut is unlikely, but the Fed may still act to reduce interest rates later this month.
‘The [US stock] market is priced for a fairly definitive scenario. A 50 basis-point rate cut is almost certainly off the table for July, but we [investors] will largely stay priced for 25 basis points through the end of July,’ said Faranello.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Non-farm payrolls report
Discover how the non-farm payrolls report affects the American markets ahead of the next announcement on 1 November 2019.
Which markets could become more volatile after the NFP report?
Why was the report introduced and what does it really tell us?
Why is the report important for traders?
Live prices on most popular markets