July non-farm payrolls fell 23K, missing forecasts, while Canada added 75.1K jobs, easing inflation concerns and boosting rate cut expectations.
US employers cut 23K jobs in July, the first decline since 2020, compared with forecasts for an 80K gain. The report reinforced expectations that the Federal Reserve may cut rates in September, with odds now below 50% for a hike.
Canada’s labor market added 75.1K jobs, far exceeding the 15K estimate. The US and Canada are also discussing a tariff relief deal. One-year inflation expectations dipped to 3.6% from 3.7%, according to a New York Fed survey.
Markets reacted sharply, with the S&P 500 rising 0.6% and the Nasdaq up 1.3%. Gold surged $106 to $4345, while US 10-year yields fell 2.8 bps to 4.64%. The dollar weakened broadly, with USD/JPY dropping to 157.50 as Japan’s finance minister hinted at intervention.