The June jobs report showed that hiring remained solid, as employers added 209,000 payroll positions. While it wasn't the red-hot report investors feared, the unemployment dipped and wage growth showed unexpected strength. The S&P 500 fought its way into positive territory in early Friday stock market action after the jobs report, though odds of multiple additional Fed rate hikes eased a bit.
Jobs Report Hits And Misses
Employment gains came close to Wall Street's 213,000 forecast. However, the private-sector added just 149,000 positions, well below estimates of 199,000. Meanwhile, government payrolls rose by 60,000.
The average hourly wage rose 0.4% on the month, topping 0.3% forecasts. Annual wage growth of 4.4% exceeded 4.2% forecasts. May's gain was revised up to 4.4% from 4.3%.
The length of the workweek rose to 34.4 hours vs. 34.3 hours in May. Hiring strength in recent jobs reports through May had been offset by a drop the average workweek to the shortest since April 2020, during the Covid lockdown. That's no longer the case.
The unemployment rate eased to 3.6%, matching forecasts.
Solid hiring gains in April and May were revised down by a combined 110,000 jobs. May's initially reported gain of 339,000 was revised to 306,000.
The headline job and wage figures come from the Labor Department's monthly survey of employers. The separate household survey details labor force participation, work status and the unemployment rate.
Household survey data showed the ranks of the employed rising 273,000 and unemployed shrinking by 140,000 as 133,000 people joined the labor force. The labor force participation rate, a measure of those working or actively seeking work as a share of the 16-and-up population, held at 62.6%.
S&P 500 Reaction
The S&P 500 rose 0.1% shortly after Friday's opening bell.
After closing at a 14-month high on Monday, the S&P 500 has slipped the past two sessions amid strong economic data and rising Treasury yields.
Through Thursday, the 10-year Treasury yield had jumped 22 basis points on the week to a four-month high 4.04%. After the jobs report, the 10-year yield rose as high as 4.09%, but pulled back to 4.04%.
Markets could be in for a period of consolidation after a huge rally. Through Thursday, the S&P 500 has surged 23.3% from its bear market closing low on Oct. 12.
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Fed Rate Hike Odds
Markets are now pricing in 95% odds of an additional quarter-point Fed rate hike on July 26, up for 92% on Thursday. Odds of a second additional hike on Sept. 20, which would lift the federal funds rate to a range of 5.5% to 5.75%, dipped to 21% after the job report from 28% the prior day. Markets see 39% of a second hike by the Nov. 1 meeting, down from 49% Thursday.
More Jobs Report Details
Leisure and hospitality sector employment rose by 21,000. Private education and health services jobs grew by 73,000.
Construction jobs rose by 23,000. Manufacturers added 7,000 jobs.
Soft spots included temporary help services, which shed 12,600 jobs. Retailers cut 11,200 jobs.
