US Hiring Slows Sharply in June as Payrolls Rise Just 57,000

The US labor market slowed markedly in June, with nonfarm payrolls rising by a seasonally adjusted 57,000, well short of the roughly 115,000 economists had expected and down sharply from the prior month. The report, released a day early because of the July 4 holiday, also revised April and May hiring lower by a combined 74,000 positions, underscoring a loss of momentum after a stronger spring. The unemployment rate unexpectedly edged down to 4.2% from 4.3%, while average hourly earnings rose 0.3% on the month and 3.5% over the year. Hiring held up in professional and business services, healthcare and social assistance, but leisure and hospitality shed jobs, and labor-force participation slipped to a five-year low. Markets read the data as making a July rate hike unlikely, even as new Federal Reserve Chair Kevin Warsh, speaking at a central banking forum in Portugal, insisted that prices remain too high and that the central bank will not tolerate inflation above its 2% goal. Short-term Treasury yields fell as investors trimmed bets on further tightening.