Weak June Jobs Report Triggers Reevaluation of Rate Hikes

The June US jobs report revealed a significant underperformance, with only 57,000 new nonfarm payrolls added. This is roughly half of the 115,000 that economists had predicted.

The Bureau of Labor Statistics released the Employment Situation report on July 2, which showed a downward revision to May's figures from 142,000 to 129,000 nonfarm payrolls.

The unemployment rate technically improved to 4.2%, but this was partly due to a decrease in labor force participation, not an increase in job creation.

The Federal Reserve had been expected to make a decision on interest rates based on strong economic signals, but the weak jobs report has significantly reduced the probability of a July rate hike below 20%.