U.S. June Payrolls Add 57,000 Jobs, Miss Forecast, Prompting Fed Rate‑Hike Pause

The U.S. Labor Department reported that non‑farm payrolls increased by just 57,000 in June, well below economists’ expectations of roughly 100,000–110,000. The unemployment rate edged down to 4.2% as the labor‑force participation rate fell to 61.5%, a five‑year low, indicating many workers left the labor market. Earlier months were revised downward, with April and May job gains cut by a total of 74,000. Wage growth continued at a 3.5% annual pace, while inflation remained elevated at about 4%.

The weaker‑than‑expected jobs data nudged financial markets lower: the U.S. dollar slipped, posting its biggest weekly decline in nearly three months, while the yen rallied and the euro hovered near a two‑week high. Traders reduced the market‑implied probability of a Federal Reserve rate increase at the September meeting from roughly 64% to about 52%. Fed Chair Kevin Warsh reiterated the central bank’s commitment to bringing inflation back to its 2% target, while Fed officials debated whether the labor‑market slowdown eases pressure for further tightening. Sector‑by‑sector, professional and business services, health care and construction added jobs, whereas leisure and hospitality shed about 61,000 positions.