US June job creation slows, unemployment drops to 4.2%

The U.S. Labor Department reported that 57,000 non‑farm jobs were added in June, far below economists' median forecast of about 110,000 and well under the 129,000 revised figure for May. The unemployment rate fell to 4.2% from 4.3% in May, marking a modest improvement amid a still tight labor market.

Analysts said the weaker payroll figure reduces market expectations of multiple Federal Reserve rate hikes this year. A CME FedWatch poll showed the probability of a September hike at roughly 51%, down from earlier estimates. While some tightening remains likely, the data suggest a less aggressive monetary stance may be pursued.

The report also incorporated downward revisions to the previous two months' job gains, indicating that the labor market has been weaker than earlier reports suggested.