Despite another month of trade tensions, the US economy has continued to produce jobs at a faster rate, drawing additional Americans into the workforce.
According to the US Bureau of Labor Statistics, the US economy created 213,000 jobs in the non-farm sector in June. The latest figures also include upward revisions to previous employment numbers and figures for April and May were revised up by a total of 37,000.
ANZ economist Kishti Sen said the report was indicative of continued labour market growth which would not impede Federal Reserve rate rises. “Overall, it was a solid report and there is no evidence of any let-up in labour market strength despite the maturity of the business cycle and trade concerns. The momentum in the jobs data is still consistent with the Fed hiking in September.”
Economists were expecting around 195,000 additional positions but US financial markets reacted by sending both short-term yields and longer-term yields lower. At the close of business, 2 year bond yields were 2bps lower at 2.53%, 10 year yields had slipped 1bp to 2.82% and the yield on 30 year Treasury bonds had lost 2bps to 2.93%. The US currency was weaker against other major currencies. According to cash futures prices, the implied probability of a rate rise by the US FOMC at its June meeting fell back from 82.2% to 79.6%.