Employment Data Summary - In June, the U.S. added 147,000 non-farm jobs, exceeding the expected 110,000[2] - The unemployment rate fell to 4.1%, lower than the expected 4.3% and previous 4.2%[2] - Labor force participation rate was 62.3%, slightly below the expected and previous 62.4%[2] - Average hourly earnings increased by 0.2% month-on-month, below the expected 0.3% and previous 0.4%[2] Market Reactions - Following the non-farm data release, U.S. stock markets rose, with the S&P 500, Nasdaq, and Dow Jones increasing by 0.8%, 1.0%, and 0.8% respectively[2] - The 10-year U.S. Treasury yield rose by 6.3 basis points to 4.34%[2] - The U.S. dollar index increased by 0.4% to 97.1, while spot gold prices fell by 0.9% to $3326.1 per ounce[2] Fed Rate Expectations - The probability of a rate cut in July dropped from 25% to 0% after the non-farm data release[2] - The probability of a September rate cut decreased from 100% to approximately 73%[2] - The expected number of rate cuts for the year was revised down from 2.6 to 2.1[2] ADP vs Non-Farm Data - The ADP report showed a loss of 33,000 jobs in June, significantly below the expected gain of 95,000[3] - The divergence between ADP and non-farm data is attributed to differences in statistical coverage and the impact of tariffs[3] - Non-farm data is considered more reliable as it covers approximately 80% of employment positions compared to ADP's 17%[3] Economic Outlook - The strong non-farm data suggests resilience in the U.S. economy, supporting previous assessments[4] - The report indicates that if tariffs do not escalate further, a soft landing for the economy remains likely[4] - The Federal Reserve is expected to maintain a cautious stance given manageable economic downturn risks and rising inflation concerns[4]

Group 1 - The ADP report indicates that U.S. private sector job growth slowed to a near standstill in May, with only 37,000 jobs added, the lowest level in over two years, and significantly below the market forecast of 110,000 [1][3] - The report shows a mixed picture in the labor market, with the goods-producing sector losing 2,000 jobs, while the construction industry added 6,000 jobs, partially offsetting losses in other areas [3][4] - In the services sector, leisure and hospitality added 38,000 jobs, while professional/business services and education/health services saw declines, contributing to the overall slowdown in job growth [3][5] Group 2 - The annual salary growth rate for retained employees is 4.5%, while for those who switch jobs, it is 7%, indicating a strong wage growth environment despite the slowdown in job creation [3][5] - Market sentiment remains mixed, with some economists expressing concerns about the limited hiring and low turnover rates, suggesting that the labor market may not sustain its current state for long [5][6] - Federal Reserve officials maintain an optimistic view of the economy, but there are rising concerns about the potential impact of trade policies on inflation and employment [5][6]