CIBC Private Wealth
July 04, 2025
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The US Bureau of Labor Statistics released June’s labour market report yesterday, and the data was better than expected. It showed that the economy continued to add jobs, which helped push the unemployment rate lower. This eased concerns about the US labour market that had heightened on Wednesday after ADP reported that private businesses had lost jobs during the month. The report also changed market expectations of a US Federal Reserve Board (Fed) rate cut this month. The US labour market has shown small signs of cracking in recent months but remains relatively solid.
- The US economy added 147,000 jobs in June, which exceeded the 106,000 jobs economists had expected, based on a Bloomberg survey. Job additions have leveled off after a strong end to 2024.
- Employment within the government sector increased by 73,000 jobs in June. This was driven by 40,000 job additions in education. Hiring in the private sector was more subdued. The manufacturing and wholesale trade industries lost jobs during the month.
- The US unemployment rate fell to 4.1% in June from 4.2% in the previous month.
- A separate report showed initial jobless claims dropped to 233,000 over the week ended June 28.
- The results lowered markets’ expectations for a Fed rate cut this month. With inflation still above target and a solid labour market, the Fed has a bit more time to monitor the impact of tariffs on the economy.
The Fed makes its next interest rate announcement on July 30, when it is expected to hold its policy interest rate steady at 4.25%-4.50%. While the labour market has slowed slightly from 2024, it remains relatively solid. However, there is concern that ongoing trade disruptions could start weakening the U.S. labour market. Canada has already seen soft labour market conditions amid trade tensions with the US. Canada will release its June labour market report next Friday.
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