206,000 New Jobs Created in the USA in June – E24

“Key figures of the month” from the United States exceeded expectations.

Investors' eyes are on the numbers released Friday afternoon by US authorities in the important labor market report, “Non-Farm Payrolls.”

The bottom line is that 206,000 new jobs were created in June outside the agricultural sector, slightly more than the 190,000 that analysts had expected in advance, according to Bloomberg.

“The US economy is still doing very well. There were some signs that things were cooling off recently, but we are now seeing stronger job growth than expected,” says Kerry Knudsen, chief economist at Sparebank 1 SR-Bank.

The Nonfarm Payrolls report is an important indicator of how the U.S. economy is performing. The number of new jobs is sometimes referred to as the “most important number of the month.”

In May, the report beat expectations, with 272,000 new jobs created outside the agricultural sector. However, the strong jobs figure was revised down to 218,000 in today’s report from 272,000.

The yield on the 10-year U.S. government bond, also called the 10-year Treasury note, fell from 4.33 to 4.30 after the figures were released.

“On the one hand, the review of previous months and rising unemployment are increasing the odds of a Fed rate cut in September — and bond markets are certainly celebrating this,” said Seema Shah, chief global strategist at Principal Asset Management. cnbc.

Wage growth has declined.

There were also unemployment and wage growth figures for the world's largest economy:

• The unemployment rate rose slightly to 4.1 percent from 4 percent. Analysts had previously expected the unemployment rate to remain unchanged.
• Wage growth fell from 4.1 percent to 3.9 percent, just as analysts had expected.

– Unemployment is on the rise. At the same time, wage growth is slowing. It is still much higher than it was before the pandemic. And productivity growth is now likely to be low in the second quarter as well, Harald Magnus Andreasen, chief economist at Sparebank 1 Markets, tells E24.

–Not good numbers for the Fed.

Ahead of the figures, DNB Markets' chief economist Kjersti Hoagland had pointed out that the figures were more important than usual, as the time for a rate cut was approaching.

The market is now pricing in the possibility of a Fed rate cut first in September and then in December, according to CME Fed Monitor.

Andreasen says employment growth is holding up well in headcount.

The chief economist believes that cost growth for businesses is at an all-time high.

– It's not a good number for the Fed. I think it will reinforce the belief that the Fed will cut interest rates in September. The more important reason is the gradual increase in unemployment, Andresen says.