Key facts
- U.S. job growth in June was 57,000.
- This figure is less than half of analyst expectations.
- May's job gains were revised downward to 129,000.
- The U.S. unemployment rate fell to 4.2% in June.
- The unemployment rate decrease is partly due to a shrinking labor force.
- The weaker jobs report has lowered expectations for a July Federal Reserve rate hike.
- Eurozone unemployment rate was stable at 6.2% in May.
- Italy's unemployment rate fell to 5.0% in May.
- Italy experienced a net loss of 22,000 jobs in May.
- U.S. factory orders fell 1.3% in May.
- Consumer confidence in the U.S. remains low due to inflation and stagnant wages.
U.S. job growth experienced a significant slowdown in June, with nonfarm payrolls increasing by only 57,000. This figure is less than half of analyst expectations and represents a downward revision of prior months' job gains, with May's figure revised to 129,000 from a previous 150,000. The unemployment rate, however, fell to 4.2% in June from 4.3% in May. This decrease in the unemployment rate is partly attributed to a shrinking labor force, as individuals leave the workforce.
The weak jobs report has lowered expectations for a potential Federal Reserve interest rate hike in July. San Francisco Fed President Mary Daly indicated that U.S. monetary policy is 'slightly restrictive,' but the combination of weak jobs data, uncertainty from AI growth, and persistent inflation makes the next policy step unclear. The state of the labor market is under renewed debate.
Despite the cooling job creation, U.S. stock futures extended their gains following the softer-than-expected employment report. In contrast, the Eurozone unemployment rate remained stable at a record low of 6.2% in May. Italy's unemployment rate also decreased to 5.0% in May, falling below expectations, although the country experienced a net loss of 22,000 jobs during the month, with the jobless rate decline linked to people leaving the labor force.
Separately, new orders for U.S. factory goods fell 1.3% in May, primarily due to a significant drop in commercial aircraft bookings. However, demand in other sectors remained robust, supported by artificial intelligence investments, and manufacturing activity continued to expand. Consumer confidence in the U.S. remains low due to persistent inflation and stagnant wage growth, with Americans saving less and credit card delinquencies rising, impacting their ability to find better-paying work, despite a resilient job market.