Strong June jobs report may delay Fed rate cuts

The Department of Labor released reports yesterday showing that US employers added 147,000 jobs in June, well above expectations. The unemployment rate fell to 4.1%, beating forecasts of a rise to 4.3%.

Most new jobs came from health care and social assistance (58,600), leisure and hospitality (20,000) and construction (15,000). The state and local government education roles increased by 63,500. However, the federal government shed 7,000 jobs last month.

Long-term unemployment rose by 190,000 to 1.6 million people. Approximately 38.3% of them have been out of work for 15 weeks or more.

The solid June jobs report has major implications for the Federal Reserve, which is under pressure from President Donald Trump to slash interest rates.

However, economists say that a stable labor market environment will likely prompt the Fed to hold rates steady. 

Markets now expect the next possible rate cut in October.