John Lynch, CIO of Comerica Wealth Management, explains why he encourages investors “not to get out yet” of the market rally.
U.S. employers added 206,000 jobs in June, beating expectations and slightly below the revised 218,000 gain in May, signaling continued strength in the labor market. The unemployment rate rose slightly to 4.1% from 4%.
That’s a combined downward revision of 111,000 from both April and May data points, suggesting slower job creation — something that may be welcomed by the Federal Reserve, which is looking for signs of easing inflation.
US stocks rose following the report.
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| Me: DJI | Dow Jones Average | 39301.53 | -6.47 | -0.02% |
| SP500 | S&P 500 | 5535.04 | -1.98 | -0.04% |
| I:Comp | Nasdaq Composite Index | 18211.550838 | +23.25 | +0.13% |
Average hourly wages, another inflation measure, rose 3.9% year-on-year, in line with expectations.
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Hiring was strongest in the government, social assistance and health sectors, while retail and manufacturing saw job cuts.
This follows a notable ADP report: The company will create 150,000 jobs Last month’s payrolls fell short of the 160,000 increase expected by economists surveyed by Refinitiv and were down from a revised May figure of 157,000.
Both sets of data are being closely watched by the Federal Reserve and will influence when policymakers begin a long-awaited cycle of rate-cutting, after Chairman Jerome Powell reiterated the need to slow inflation in a speech earlier this week.
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“We want to have greater confidence that inflation is falling sustainably towards 2 percent before beginning the process of easing monetary policy,” he said in a speech at the European Central Bank Forum.
Market participants are now pricing in a first rate cut at the September meeting, according to CME’s FedWatch tool, which tracks potential interest rate changes.
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