Job growth in the US once again surprised gloomy forecasters and supressed worries for an imminent downturn in world’s largest economy, as the latest NFP print once again broadcasted resiliency, despite the restrictive monetary policy environment, created by the Fed.
The jobs report for June showcased that 147k new jobs were created, toppling the 110k expectations and at the same time, last month’s reading was upwardly revised to 144k. The print for June was the fourth straight month of surprise beat of the headline NFP number, with the employment market not showing the expected weakness that was projected to arise from Trump’s fiscal and tariff policies.
Another interesting aspect is that the unemployment rate unexpectedly failed to rise to 4.3% and on the contrary, it eased to 4.1% level, remaining close to historic averages, cementing the durability of the economy amidst high interest rates.
In the aftermath of another stronger than expected data set we have seen bond yields rising alongside equity markets, as money markets were forces to pare bets on rate cuts later this year. Evidently, odds for a swift rate cut in July, were practically wiped out and forecaster now foresee only two cuts from the Federal Reserve, once in September and another in December, for a cumulative total of 50bps, contrary to three rate reductions seen before the NFP print.
Technical Analysis
DJ30 Chart – Dow Jones plays catchup with Nasdaq and S&P500, gears up to break into record highs
Resistance: 45000 (R1), 46500 (R2), 47700 (R3)
Support: 43300 (S1), 41800 (S2), 40200 (S3)
