June Job Growth Rises, July Rate Cut Unlikely
U.S. job growth exceeded expectations in June, with 147,000 nonfarm payroll additions driven largely by government hiring, easing concerns about a weakening labor market. The unemployment rate fell to 4.1%, though the drop stemmed in part from a decline in labor force participation, now at its lowest since 2022. Wage growth remained modest and full-time employment surged, reinforcing confidence in economic resilience. The stronger-than-expected report has sharply reduced market expectations for a July interest rate cut by the Federal Reserve.
Private Payrolls Shrink In June
Private sector jobs fell by 33,000 in June, according to ADP, marking the first monthly decline since March 2023 and well below expectations for a 100,000 gain. Losses were concentrated in service sectors like professional services and education/health, while goods-producing jobs rose by 32,000. Small businesses were hit hardest, while large firms with over 500 employees added 30,000 jobs. The report raises concerns about economic momentum and could lead economists to lower forecasts ahead of the government’s official jobs report.
Trump Announces Vietnam Trade Deal Amid Tariff Tensions
President Trump announced a trade deal with Vietnam, imposing 20% tariffs on Vietnamese goods and 40% on goods shipped through Vietnam by other countries, claiming the U.S. will gain full market access in return. However, U.S. importers—not Vietnam—will pay the tariffs, and specific deal terms remain unclear. The move follows Trump’s earlier proposal of a 46% tariff to address the $123.5 billion trade deficit with Vietnam, now temporarily paused at 10%. While trade between the two countries has surged, U.S. officials continue pressing Vietnam to reduce trade barriers and allow greater access for American goods.
