Strong job growth in June shows economic resilience despite trade war tariffs
- Alexangel Ventura
- Jul 3
- 2 min read
June's jobs report showed quite overwhelmingly positive results for the American labor market, exceeding expectation and leading to a bullish stock market on Thursday.
The jobs report recording new job openings in the month of June showed that the economy added roughly 147,000 nonfarm payrolls in June, far more than the 106,000 predicted by many economists. In the previous month of May, the economy added 144,000 jobs, keeping unemployment stable. This was also an overperformance, albeit much less than June's.
The national unemployment rate official fell to 4.1% from May's 4.2%, a great overperformance compared to what economists anticipated, a rise of the unemployment rate to 4.3%.
Most of these jobs came from government employment, which constituted roughly half of all gains, or 73,000 jobs.
Kevin O'Neil, the Associate Portfolio Manager at Brandywine Global, commented on the performance of the bond market after the jobs report, stating, "The bond market clearly wasn’t expecting such a strong jobs report... a 4.1% unemployment rate significantly reduces the urgency for aggressive action." [referring to potential Fed rate cuts]
This news does indicate that the job market is not crushing from tariffs and trade war pressures as many economists previously expected. In fact, predictions for a potential rate cut in July fell as investors and economists believe that after these strong results, a rate cut would not be necessary.
However, this news was not all perfect. According to this data as well as data from the ADP yesterday, private sector payrolls grew by 74,000, the lowest increase since October 2024.
Eugenio Aleman, the Chief Economist at Raymond James, noted that while the overall job growth was decent, the private sector showed signs of weakness. He stated, "Although the overall number of jobs was very strong, the weakness was broad-based across the private sector," highlighting concerns regarding the resilience of the current labor market's strength in the future as the threat of tariffs linger.
Nevertheless, stocks have reacted very positively to this news. As of 1:17 PM EST Thursday, the S&P 500 is up 0.8% and the Nasdaq is up 1.01%.
