Strong June Jobs Report Tempers Immediate Fed Rate Cut Expectations 

June nonfarm payrolls rose by 147,000, beating economists’ expectations for a 110,000 increase and slightly ahead of May’s upwardly revised 144,000 (from 139,000), according to new data from the U.S. Bureau of Labor Statistics. The unemployment rate dipped to 4.1%, below the 4.3% consensus and May’s 4.2% print. April and May’s job gains were revised up by a combined 16,000 jobs, adding to the labor market’s solid footing. 

Average hourly earnings climbed 0.2% for the month and 3.7% year over year, a sign that wage growth remains steady without fueling inflation — and may point to ongoing competition for workers despite a cooling hiring backdrop. 

The report highlights the economy’s surprising resilience in the face of mounting headwinds from President Trump’s tariffs and government job cuts. It also contrasts with weaker private sector hiring data released earlier this week by ADP, fueling the debate over whether the trade war will ultimately push the Fed to cut rates sooner rather than later. 

For now, the stronger numbers reinforce the Fed’s patient approach. According to the CME FedWatch tool, markets are pricing a roughly 5% chance of a rate cut at the July meeting. A September cut is more likely, with odds of a quarter-point reduction standing at 74%. 

Treasuries sold off immediately following the report, lifting the 10-year U.S. yield to 4.35% from 4.28% pre-release — a notable jump as traders dial back expectations for imminent easing.