Adds 224,000 Jobs in June, Rebounding After Weak May Numbers

The market is still on track to close out the week with a gain.

The S&P index recorded 14 new 52-week highs and no new lows, while the Nasdaq recorded 32 new highs and 33 new lows.

The report for June shows that US employers added 224,000 jobs last month after Wall Street economists reportedly predicted only 160,000.

Most recently, at its June policy-setting meeting, the Fed hinted at the possibility of a rate cut in July, though noted it ultimately depended on uncertainties surrounding the U.S.

"Fed officials will have plenty of time with their public appearances in the coming weeks to reset or affirm those rate-cut expectations", said Mark Hamrick, senior economic analyst.

Trading volumes are likely to be thin at the end of a holiday-shortened week as markets were shut on Thursday for Independence Day holiday.

Dow Jones Industrial Average swings sharply lower after the open on Friday. The African-American unemployment rate ticked down by 0.2 percentage point to 6.0 percent, just above the May 2018 series low of 5.9 percent.

MSCI's gauge of stocks across the globe.MIWD00000PUS shed 0.56%.

Average hourly wages grew 3.1 percent in the past year, above the cost of living, but a bit weaker than economists were expecting. The construction industry, which had been adding jobs at an annual rate of more than 300,000 at the start of this year, is now adding positions at an annual rate of 215,000. "That's likely to impact businesses' investment decisions but also their willingness to bring on new workers". Chipmaker Nvidia dropped 1.7%.

Shares in video game company Electronic Arts slid 4.3%, one of the biggest losers in the S&P 500. But she cautioned that the fundamental trade dispute between the USA and China has not been resolved.

While overall job growth has increased, it has plateaued in industries directly impacted by the trade war. Growth "would be like a rocket ship" if the Fed eased, he told reporters at the White House earlier Friday. Still, forecasters warn the truce is fragile because the two sides still face the disputes that caused talks to break down in May.

"We think the Fed is still on track for a 25 basis points cut given trade uncertainty and the steady downtrend in business sentiment", said Andrew Schneider, a USA economist at BNP Paribas Securities in NY. But to argue that the economy needs the monetary easing soon, that's a very different argument that is much harder to support. On the eve of his formal re-election announcement, Trump warned of an epic stock market crash if he was not returned to office in 2020. Traders trimmed their bets on Fed rate cuts after the report was released.

The Fed, in its semiannual report to Congress, repeated its pledge to "act as appropriate" to sustain the economic expansion, and said while USA economic growth continued "at a solid pace" in the first half of the year, it likely weakened in recent months as higher tariffs weighed.

  • Zachary Reyes