US jobs growth slowed sharply in June, leading investors to reduce expectations for Federal Reserve tightening this year.
US nonfarm payrolls rose by 57,000 in June, well below forecasts, while prior months were revised downward. The report fueled a decline in interest rate expectations as markets priced out further Fed hikes.
Consensus estimates had called for 190,000 new jobs, following a downwardly revised 218,000 in May. Wage growth held steady at 0.3% month-on-month and 3.5% year-on-year, matching projections, but the unemployment rate dipped to 4.2% due to lower labor force participation.
Investors now see virtually no chance of a July rate increase, with odds of additional hikes later in 2024 also falling. The shift weighed on yields and supported risk assets, including equities and gold.