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US adds 206,000 jobs in June as unemployment rate rises to highest level since November 2021
The U.S. labor market remained reasonably strong in June, with the U.S. Bureau of Labor Statistics reporting on Friday the creation of 206,000 jobs, down from May’s 218,000 (revised from the originally reported 272,000) but modestly beating economists’ estimates of 190,000.
The unemployment rate in June rose to 4.1%, compared with 4.0% in May and forecasts of 4.0%.
Average hourly earnings rose 0.3% compared with May’s 0.3% and 0.4% forecasts. Looking at the metric on a year-over-year basis, it was higher at 3.9% from expectations of 3.9% and the previous month’s 4.1% reading.
The price of bitcoin (BTC) fell slightly to $55,300 in the minutes following the news, but the drop is insignificant given the roughly 10% drop in the past 48 hours as markets grappled with the increased supply coming from Mt. Gox Refunds and German government sales.
Ahead of this morning’s data, traders were placing almost zero chance of a U.S. Federal Reserve rate cut at the bank’s July 31 meeting, but more than a 70% chance of lower rates at the mid-September meeting, according to the CME FedWatch tool. In his speech this week, Fed Chairman Jerome Powell sounded a bit more moderate, suggesting that a weaker labor market could outweigh inflation concerns as the central bank decides its path forward for monetary policy.
While the headline figure of 206,000 jobs added beat forecasts, other data suggests some weakness. May’s job gain was revised down from 272,000 to 218,000. Additionally, April’s originally reported job gain of 165,000 was revised down to 108,000. Taking the three months together, it shows an average job gain of 177,000 versus 249,000 in the previous quarter.
Additionally, while the unemployment rate rose modestly, the 4.1% reading is the highest level since November 2021.
A check of traditional markets showed U.S. stock index futures rose after the report and the yield on the 10-year Treasury note fell five basis points to 4.31%.