June Jobs Report Dashes July Rate Cut Hopes: What the Experts Are Saying

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The June jobs report came in stronger than expected, underscoring a slowing but still healthy labor market. This is good news for the Fed, which has repeatedly said it is in no rush to lower interest rates, even as President Donald Trump pushes the central bank to cut rates sooner rather than later.

According to the Bureau of Labor Statistics, nonfarm payrolls rose by 147,000 in June. This was slightly higher than May's upwardly revised 144,000 figure and more than the 110,000 new jobs economists expected. April jobs growth was also raised, by 11,000.

Job gains in June were seen in state government (+47,000), while health care (+39,000) and social assistance (+19,000) employment trended higher. However, federal government jobs declined by 7,000, and are now down by 69,000 since January.

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The unemployment rate, which is calculated from a separate survey, ticked lower to 4.1%.

The data also showed that wage growth was up 0.2% month over month in June and 3.7% year over year.

Today's jobs report defies, "at least for now, the signs of weakness seen in some leading indicators," says Simon Dangoor, head of Fixed Income Macro strategies at Goldman Sachs Asset Management.

The Fed's conviction "that it should hold its wait-and-see stance while it braces for an acceleration in inflation over the summer will only be strengthened," Dangoor adds.

Still, he believes the Fed could resume rate cuts later this year "should the summer acceleration in inflation prove more modest than expected, or the softening in the labor market exceed the relatively low thresholds implied by the dot plot."

According to CME FedWatch, futures traders are pricing in a 93% chance the Fed keeps the federal funds rate unchanged when it meets at the end of this month, up from 76% one day ago. Odds of a September rate cut are currently at 71%.

With the June jobs report now in the books, here's some of what economists, strategists and other experts around Wall Street have to say about the results and what they could mean for investors going forward.

Experts' takes on the June jobs report

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"The June jobs report continues to demonstrate resilience across the labor market, even as certain sectors such as manufacturing continue to lag. The unemployment rate is holding steady at 4.1 percent, and real average hourly earnings for employees experienced its largest increase of the year. Still, even with a booming stock market, consumers are signaling a softening economy, as consumer confidence fell for the sixth time in seventh months and discretionary spending saw its steepest monthly decline since February 2023." – Joe Gaffoglio, President and CEO at Mutual of America Capital Management

"The solid June jobs report confirms that the labor market remains resolute and slams the door shut on a July rate cut. Today's report saw a trifecta of positives that should send the labor bears back into hibernation: a drop in the unemployment rate, a solid beat on headline job creation vs consensus, and positive revisions to the prior two months. Softer average hourly earnings (wage) gains suggest that a wage-price inflationary spiral shouldn't be a near-term concern, setting up something resembling a goldilocks scenario." – Jeff Schulze, Head of Economic and Market Strategy at ClearBridge Investments

"These numbers demonstrate economic resilience despite expectations for slowdowns on the backs of tariff and fiscal uncertainty. While many will not want to believe this solidifies a strong labor market, especially on the backs of a negative ADP print, what this print does solidify is that the Fed does not have the data to contemplate a cut in July. Bond markets are, therefore, repricing yields higher, and investors should continue with the mindset of higher for longer." – Lara Castleton, U.S. Head of Portfolio Construction and Strategy at Janus Henderson Investors

"We still expect the Federal Reserve to continue its wait-and-see approach on interest rates, pushing any potential rate cuts into the fourth quarter of this year. We expect the Federal Reserve to cut interest rates twice in 2025, although the timing of it will depend on the next few months' worth of labor market and inflation data. Earnings season begins in mid-July and we will likely hear a more updated view on how companies are navigating the uncertainty from tariffs and if they have been able to resume any paused business projects now that the tariff situation is starting to resolve itself." – David Laut, Chief Investment Officer at Abound Financial

"Given the strong jobs numbers along with the extension of tax cuts and potentially higher tariff levels (once the 90-day pause expires), the Fed is much less likely to cut rates this month than many were talking about earlier this week. Instead, the Fed is likely to wait until later in this quarter or even until the fourth quarter before they cut interest rates. Given that backdrop, the stock market is likely to ignore the greater macroeconomic picture in the short run and focus much more on corporate earnings, which will kick off in less than two weeks." – Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management

"The jobs numbers have now delivered better than expected four months in a row. A good labor market with real wage gains will ultimately drive consumer spending. Toss on top the potential $3 trillion stimulus in the big bill. That will continue to drive equity markets higher. With another strong jobs report, the best chance for the White House to influence rates is by following through on the July 9 pledge to increase tariffs on most countries. Investors are not out of the woods yet, and another bout of volatility would not be surprising." – Scott Helfstein, Head of Investment Strategy at Global X

With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.