U.S. Jobs Increase by 57,000 in June, Missing Estimate for 110,000 (UPDATED)

The June U.S. jobs report showed a sharp labor market cooldown, with payrolls rising by just 57,000 versus 110,000 expected and down from May’s revised 129,000. Despite the weak headline, unemployment edged lower to 4.2% and wages rose 3.5% year over year. Market reaction was risk-on: equity futures climbed, small caps outperformed, Treasury yields fell, the U.S. dollar weakened, and gold rallied on expectations the Fed would avoid near-term tightening. The report also reduced the odds of a July rate hike sharply, with markets pricing in a hold as the likely outcome. Overall, the data supported the view that softer labor conditions and easing oil prices may give the Fed room to stay on pause, which is constructive for stocks and especially rate-sensitive assets.