Strong job growth is back: Payrolls jump in June well above expectations
- Nonfarm payrolls rose 224,000 in June, well above market expectations of 165,000, according to the Labor Department.
- The unemployment rate edged higher to 3.7% but was still near 50-year lows.
- Wage growth was 3.1% year over year, one-tenth of a point below market expectations.
- Stocks opened lower on the news and government bond yields surged.
Payroll growth rebounded sharply in June as the U.S. economy added 224,000 jobs, the best gain since January and running contrary to worries that both the employment picture and overall growth picture were beginning to weaken. The unemployment rate edged up to 3.7% as labor force participation rose, according to the Labor Department.
Economists surveyed by Dow Jones had expected nonfarm payrolls to rise by 165,000 and the unemployment rate to hold steady at 3.6%. May’s initially reported growth of 75,000 had raised doubts about the durability of the record-setting expansion that began a decade ago. The May count was revised lower to 72,000.
Federal Reserve policymakers have been watching the jobs numbers closely.
Markets have been widely anticipating that the central bank will cut its benchmark interest rate later this month, regardless of what the June payrolls count showed.
The stock market opened lower as investors contemplated what the report might mean for expectations that the Fed will be cutting interest rates later this month in an effort to stave off a widely expected economic slowdown through the year.
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