US unemployment rate 4.0% vs. 3.8% expected

US June jobs report highlights:

  • non farm payroll 213K versus 195K
  • prior month revised higher to 244K vs 223K
  • unemployment rate rises to 4.0% from 3.8%
  • average hourly earnings 0.2% versus 0.3%
  • average hourly earnings year on year 2.7% versus 2.8%
  • labor force participation rate rises to 62.9% from 62.7%. More participation led to the rise in the unemployment rate)
  • changing private payrolls 202K versus 190K. Prior month revised higher to 239K versus 218K
  • 2 month net payroll revision +37k labor participation
  • The underemployment rate came in at 7.8% vs 7.6%
  • Manufacturing jobs 36 vs 15K expected
  • Health care added 25K
  • Constuction added 13K
  • Retail lost 22K
  • Average workweek unchanged at 34.5 hours
  • Unemployed persons increased by 499,000 to 6.6 million (vs 7.0M last year)

The US June employment statistics came out showing stronger job growth with the headline non farm payroll better-than-expected and revisions higher. However, the wage growth was disappointing at 0.2% vs 0.3% and 2.7% YoY vs 2.8%. The labor participation rate rose which helped lead to the uptick in the unemployment rate to 4.0%.

The USDJPY has moved lower on the back of the higher employment rate and the lower wages. However, it will not change the Fed's thinking that gradual hikes are needed.

The Dow are implying a 30 point gain. The S&P futures are implying a 4 point gain. Treasury yields are a touch lower.