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US Economy Adds 209,000 Jobs in June, Missing Expectations and Reflecting Slowdown

In a surprising turn of events, the US economy added 209,000 jobs in June, falling short of Wall Street estimates and indicating a slowdown compared to the previous month, according to data released by the Bureau of Labor Statistics on Friday.

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Economists surveyed by Bloomberg had anticipated the addition of 225,000 nonfarm payroll jobs in June, but the latest report reveals a lower figure, marking the first time in 15 months that nonfarm payrolls have failed to meet Wall Street’s expectations. Furthermore, revised data indicate that 306,000 jobs were created in May, approximately 33,000 fewer than initially reported.

Despite falling short of predictions, the unemployment rate for June came in at 3.6%, a slight improvement from May’s rate of 3.7%. Economists had expected the rate to remain unchanged at 3.6%.

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According to Bloomberg, these are the key figures in comparison to Wall Street’s expectations:

Nonfarm payrolls: +209,000 vs. +225,000

Unemployment rate: 3.6% vs. 3.6%

Average hourly earnings, month-on-month: +0.4% vs. +0.3%

Average hourly earnings, year-on-year: +4.4% vs. +4.2%

Average weekly hours worked: +34.4 vs. +34.3

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Investors have been closely monitoring the job market data to gain insight into the Federal Reserve’s next moves in their efforts to combat inflation through interest rate adjustments. With strong economic releases earlier in the week and the disappointing jobs report, futures tied to the Federal Reserve’s benchmark interest rate now indicate a 95% probability of an interest rate hike at the upcoming Federal Reserve meeting, scheduled to begin on July 25, according to the CME FedWatch Tool.

In other notable findings from the report, job gains from April were revised downward, dropping from 294,000 to 217,000. This revision indicates that job growth over the two-month period was lower by 110,000 than previously reported.

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By industry, the government sector experienced the largest increase, adding 60,000 jobs in June. The healthcare industry saw the addition of 41,000 jobs, while the construction sector added 23,000 jobs. Professional and business services contributed 21,000 jobs, and employment in the leisure and hospitality sectors increased by 21,000, although it remains below pre-pandemic levels. However, retail trade employment, including furniture, home furnishings, electronics, and appliance retailers, declined by 11,000 in June.

The unexpected slowdown in job growth raises concerns about the pace of economic recovery and could have implications for future monetary policy decisions and market dynamics.