Weak June Jobs Report Quiets the Rate-Hike Conversation
The June jobs report came in well below economists' estimates, but the unemployment rate ticked lower.
Jobs data has "been moving in a good direction," said Federal Reserve Chair Kevin Warsh in his June 17 press conference, his first as head of the central bank. And while the June jobs report, released ahead of the July 2 open, snapped a streak of strong nonfarm payroll releases, economists don't seem too worried about the slowdown.
According to the Bureau of Labor Statistics (BLS), the U.S. added just 57,000 new jobs in June, well below the 115,000 economists expected.
Additionally, job growth for April was revised down by 31,000, from +179,000 to +148,000, and May's figure was lowered by 43,000, from +172,000 to +129,000. This results in 74,000 fewer positions than previously reported.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Professional and business services added 36,000 new jobs in June, the most of any industry tracked, while social assistance came in second with the addition of 25,000 positions.
The leisure and hospitality industry shed 61,000 jobs last month, "reflecting weaker than usual seasonal hiring," according to BLS.
The report also showed that average hourly earnings, a measure of inflation, rose 0.3% month over month and was 3.5% higher year over year.
Additionally, the unemployment rate, which is derived from a separate survey, edged down to 4.2% from 4.3%.
With the June jobs report on the books, we looked at what economists, strategists and other experts on Wall Street expect the data to show and what the results could mean for the Fed and investors going forward. You'll find these outlooks, edited at times for brevity, below.
What Wall Street has to say about the June jobs report
"The June payroll release came in cooler than anticipated, which should take some of the pressure off the Fed to hike rates in the coming months. Although the headline jobs number missed and there were negative revisions to prior months, the labor market continued to broaden with an increase of +376k jobs outside of the healthcare sector in the first half of the year, a stark contrast to the -271k figure recorded for all of 2025. The print endorses the notion that the Fed retains considerable flexibility to emphasize the price stability side of the dual mandate as the economy absorbs the effects of this year’s energy surge." - Jeff Schulze, Head of Economic and Market Strategy at ClearBridge Investments
"Job growth slowed last month, even more than expected, and gains in the prior two months were revised down. But this isn't cause for alarm. The unemployment rate remains in good territory, as does the slow, steady growth in jobs amid demographic changes and some economic uncertainty. There's bound to be some fluctuations from month to month, so this past month's slowing can be taken in stride until there is any additional evidence of trouble." - Elizabeth Renter, Senior Economist at NerdWallet
"June's payroll miss stands in stark contrast to the run of upside surprises earlier this year, but the labor market is still adding jobs and wages show few signs of accelerating. With participation weakening and hiring cooling, the Fed's decision to hold last month looks less like a policy mistake and more like prudent patience. Markets are already repricing a lower likelihood of Fed tightening as the inflation debate continues." - Eric Merlis, Managing Director and Co-Head of Global Markets at Citizens
"June's net job creation, at 57,000, was weaker than economists expected. However, this report comes on the heels of three consecutive months of solid jobs growth, and the unemployment rate, at 4.2%, remains low by historical comparison. Geopolitical and inflationary headwinds have had only a minimal effect on slowing or preventing hiring to this point, and payroll growth has already surpassed last year's pace. Despite a weaker-than-expected jobs report this month, the labor market remains resilient." - Jerry Tempelman, Former Senior Analyst at the NY Fed
"Ongoing labor market stability likely leaves the FOMC focusing on upcoming inflation data to determine its appetite for tightening policy. We still see a path for the Fed to stay on hold for the rest of the year, however any further upside surprises to inflation could convince the committee to hike sooner rather than later." - Kay Haigh, Global Head and CIO of Fixed Income and Liquidity Solutions at Goldman Sachs Asset Management
"A mixed June employment report signaled moderation in job growth from May’s accelerated rise, taking the steam out of market expectations for Fed rate hikes by year end. We anticipate moderating job growth in the coming months as the U.S. economy likely experiences some loss of momentum in a lagged response to higher fuel costs and an end to tax refunds that temporarily boosted consumer spending in the spring." - Jennifer Timmerman, senior investment strategy analyst at Wells Fargo Investment Institute (WFII)
Related content
