Economy

Nonfarm payrolls increased a seasonally adjusted 147,000 for the month, higher than the estimate for 110,000 and just above the upwardly revised 144,000 in May.
Market pricing shifted strongly following the payrolls report, with traders all but taking the chance of a July rate cut off the table.
Government employment posted a large gain, leading all categories with an increase of 73,000 due to solid boosts in state and local hiring.

Job growth proved better than expected in June, as the labor market showed surprising resilience and likely taking a July interest rate cut off the table.
Nonfarm payrolls increased a seasonally adjusted 147,000 for the month, higher than the estimate for 110,000 and just above the upwardly revised 144,000 in May, the Bureau of Labor Statistics reported Thursday. April’s tally also saw a small upward revision, now at 158,000 following an 11,000 increase.

The unemployment rate fell to 4.1%, the lowest since February and against a forecast for a slight increase to 4.3%. A more encompassing rate that includes discouraged workers and those holding part-time positions for economic reasons edged down to 7.7%.
Though the jobless rates fell, it was due largely to a decrease in those working or looking for jobs.
The labor force participation rate fell to 62.3%, its lowest level since late 2022 as the labor force, owing to an increase of 329,000 of those not counted in the labor force. The household survey, which is used to calculate the unemployment rate, showed a smaller gain of just 93,000. The ranks of those who had not looked for a job in the past four weeks swelled by 234,000 to 1.8 million.
Stock market futures held positive following the report while Treasury yields rose sharply in a trading session that will end early ahead of the Independence Day holiday Friday in the U.S.
“The solid June jobs report confirms that the labor market remains resolute and slams the door shut on a July rate cut,” said Jeff Schulze, head of economic and market strategy at ClearBridge Investments. “Today’s good news should be treated as such by the markets, with equities rising despite the accompanying pickup in interest rates.”

Along with the solid payroll gains and fall in the unemployment rate, average hourly earnings increased 0.2% for the month and 3.7% from a year ago, indicated little upward pressure on wage-related inflation. The average work week moved slightly lower to 34.2 hours.
Government employment posted a large gain, leading all categories with an increase of 73,000 due to solid boosts in state and local hiring, particularly in education-related jobs. Federal government, which is still feeling the impact of cuts from Elon Musk’s Department of Government Efficiency, lost 7,000.
In addition, health care again was strong, adding 39,000, while social assistance contributed 19,000.

The report comes with an intensified focus on where the Fed heads with monetary policy as signs increasingly appear of a slowing labor market while President Donald Trump’s tariffs thus far have produced a muted impact on inflation.
Trump has demanded the Fed lower its benchmark interest rate, which it has kept steady in a range between 4.25%-4.5% since December. Along with that, the president on Wednesday up the stakes, saying in a Truth Social post that Powell “should resign immediately.”
For his part, Powell has kept a cautious tone on policy. In an appearance Tuesday, the central bank leader said that while every meeting is on the table for a rate cut, the strength of the U.S. economy is affording time to evaluate the incoming data.
Market pricing shifted strongly following the payrolls report, with traders all but taking the chance of a July rate cut off the table. Odds for a July move fell to 4.7%, down from 23.8% on Wednesday, according to the CME Group’s FedWatch. The market continues to see the next reduction not coming until September and also reversed expectations for three total cuts this year, with the likelihood now reduced to two.
There had been some speculation ahead of the report that a weak number was possible, with private payrolls service ADP on Wednesday reporting a loss of 33,000. However, the BLS report showed a gain of 74,000 in that category.
Those getting jobs titled strongly to full-time positions, which increased by 437,000. Part-time workers fell by 367,000. More

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<!–> [–><!–> –><!–> [–><!–>The change has been particularly visible over the past year, during which health care has been responsible for about a third of all employment growth, while other categories, like retail and manufacturing, have stayed essentially flat.–><!–> –><!–> [–> <!–> –><!–> [–><!–>The nation’s corps of nurses, oncologists, lab technicians, anesthesiologists and other health-related […] More

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Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldSouth Korea’s president has expressed pessimism that “very difficult” trade talks with the US can be concluded before Washington’s self-imposed deadline next week to avert steep tariffs, noting that “the two sides are not really clear on what they want”.South Korea was “doing its utmost” to find a resolution to negotiations triggered by US President Donald Trump’s threat to impose a 25 per cent “reciprocal” tariff on Asia’s fourth-largest economy, Lee Jae Myung told reporters on Thursday. But he played down expectations that an agreement would be reached before July 9, when paused US tariffs on a host of countries were due to come into force.“We are actively identifying and developing many agenda items across various areas,” said Lee. “[But] at this point, it is difficult to say with certainty whether they can be concluded” by the deadline.Lee’s comments came after Trump threatened this week to increase levies on Japan, casting doubt that his administration would reach a deal with Tokyo.Trump’s threat to increase the “reciprocal” tariffs on Japan to 30 or 35 per cent from the original level of 24 per cent spooked South Korean policymakers, who were hoping for an extension to the deadline.Trade talks have been delayed for months owing to the political turmoil in Seoul following the impeachment of Lee’s conservative predecessor Yoon Suk Yeol.According to several people familiar with the talks between US and South Korean officials, Seoul has communicated a willingness to address its record $55bn trade surplus with the US by increasing purchases of American gas and defence equipment and by removing non-tariff barriers publicly criticised by US trade representative Jamieson Greer.The two countries are also discussing South Korean investments in US shipyards to help revive American shipbuilding, including for the US Navy, as well as a possible Korean commitment to buy gas from a potential new project being promoted by the Trump administration in Alaska.But one of the people said the talks over shipbuilding co-operation had been complicated by protectionist US legislation preventing foreign involvement in the industry. Korean companies also remain hesitant about committing to the Alaska LNG project, the viability of which has been questioned by energy industry experts, according to several people familiar with the discussions.The US accounted for 18 per cent of South Korean exports last year, according to OECD figures, with leading exports including cars and auto parts, machinery and intermediate goods to supply Korean companies building car, battery and chip manufacturing facilities in the US.Unlike Japan, South Korea has a comprehensive free trade agreement with the US under which tariff rates between the two countries should be in effect zero.As with Tokyo, South Korea is pushing for the removal of a 25 per cent US tariff on auto imports, which has driven a steep decline in Korean car exports to the US in recent months.South Korean companies have also been hit by US tariffs imposed on steel and household appliances. Seoul is also concerned that sectoral tariffs being threatened by the US against chip and pharmaceuticals imports, following investigations that are expected to conclude later this year, could lead to the unravelling of any trade settlement reached this month.A person familiar with the talks said US negotiators had expressed frustration in recent days that their Korean counterparts were “not being ambitious enough”. But they added that the Koreans were still confused about what the US side actually wants. “All they know is that whatever it is, the Americans want more.” More