The U.S. added fewer jobs than anticipated in June but still-strong wage growth and a slight drop in the unemployment rate will likely keep the Federal Reserve on track to raise interest rates at the upcoming July meeting.
The 209,000 payroll jobs added in June continued a steady climb down in the pace of hiring from the highs seen in the months when the economy was still reopening from the pandemic.
With job growth in prior months revised down by more than 100,000 jobs, the June jobs report is "a fairly soft print" with three-month average job gains now at 244,000 compared to more than 400,000 a year ago, said Omair Sharif of Inflation Insights. But progress towards a more balanced labor market is coming "slowly, slowly...These are still healthy figures" even as the pace softens.
Following release of the report traders in contracts tied to the benchmark federal funds rate upped expectations of a coming rate increase, and now see it as a virtual certainty the Fed will raise the rate to a range of 5.25% to 5.5% at the July 25-26 meeting.
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