U.S. Nonfarm Payrolls Rise 224,000, Unemployment Rate Unexpectedly Increases

The U.S. economy created more jobs than expected in June while the unemployment rate unexpectedly increased and annual wage inflation held steady, according to official government data released on Friday.

Nonfarm payrolls (NFP) rose by 224,000 in June, above consensus expectations for 160,000.

The jobless rate unexpectedly rose to 3.7%. Consensus had expected it to remain unchanged at 3.6%, what had been the lowest level since December 1969.

Wage inflation grew 3.1% on an annualized basis, holding steady at the prior month’s reading. Consensus had expected an increase to 3.2%.

U.S. futures extended losses slightly following the release with S&P 500 futures down 0.3% compared to an decrease 0.2% ahead of the report.

The U.S. dollar index, which measures the greenback against a basket of major currencies, extended gains and was up 0.4% at 96.745, compared to 96.537 ahead of the release.

The benchmark 10-year Treasury yield ticked higher after the release, topping 2%, compared to 1.97% before the publication.

Trade tensions between the U.S. and China have been steadily impacting global economic data, increasing market conviction that the Federal Reserve will need to begin easing policy.

Markets put 100% odds of a quarter-point reduction to interest rates at the next meeting on July 30 and 31 and are expecting a total of three cuts this year.