2 July 2026
If you are covering the latest US jobs data, please see the following comment from Lindsay James, investment strategist at Quilter:
“The US jobs market may be showing the first signs of weakness, with nonfarm payroll numbers coming in at just 57,000, almost halving estimates of around 110,000. Meanwhile, the unemployment rate fell slightly to 4.2% from 4.3% previously, while hourly earnings were relatively steady at 3.5%, up from 3.4% last month.
“With the previous three US jobs reports all surprising to the upside - albeit with April and May both revised down in today’s print - the June report has broken that trend, raising questions over whether earlier data may have been supported by an element of demand being brought forward. Nonetheless, the fundamental strength of the US economy has underpinned a level of market performance in the second quarter not seen since the post-pandemic rebound. However, it has also prompted the Federal Reserve to adopt a more hawkish tone in recent weeks, with its objective of maintaining price stability receiving far greater attention than the second mandate of maximising employment.
“With oil prices having fallen sharply, Kevin Warsh has acknowledged that inflation risks are easing. However, any signs of emerging weakness in the jobs market would increase the urgency for the Fed to change course. In recent weeks we have seen a smattering of softer data points, with a private payrolls report coming in slightly weaker than expected, while corporate surveys have also been slightly less positive than forecast, with respondents highlighting policy uncertainty and price pressures as key risks.
“For now, investors continue to price in one to two rate hikes in the US before year end. However, with price pressures easing and policy uncertainty likely to remain a feature of this administration, there is a possibility that those hikes may not materialise.”
