Preliminary employment data in the United States was released and it was higher than expected. That raised expectations that the Fed will raise rates soon.
The private companies in the United States created 497,000 jobs in June, a figure much higher than that of previous months and above expectations. This data, which is key to the future of the Federal Reserve’s (Fed) monetary policy, was driven in particular by a strong increase in activity in the hotel sector.
This level of job creation is the highest since July 2022 and almost double that registered in May of this year, when 267,000 new jobs were added.
This is how it reflects the monthly ADP/Stanford Lab survey released Thursday, which is a national report that measures the monthly change in jobs, but does not include data from the agricultural industry. And this month reflects a strong rise, above expectations, since half of that figure was expected, 245,000 jobs, according to the briefing.com consensus.
But, as stated, the bottom line was much higher, and that was because “the consumer services industry had a strong month in June, which led to higher-than-expected job creation,” Nella said. Richardson, chief economist at ADP.
Rates: a key piece of information for the Fed
This data is key for Federal Reserve (Fed) rate policy since it is a determining element of the evolution of the economy in the United States and of inflation. For this reason, the markets collapsed this Thursday after knowing this information, which reflects that the US monetary regulator will raise the rate shortly.
And it is that it has been carrying out a very aggressive monetary policy to control inflation. The latest data on economic activity had given indications that this trend would stop, at least for a while, given a cooling off in the economy, which resulted in a slowdown in the rate of price increases.
However, given this information from June that was known this Thursday, expectations were revived that they will raise rates again sooner than expected and that automatically changed the dynamics of all the markets, which responded with sharp falls before this new horizon that is being observed.
The Bureau of Labor Statistics (BLS) will publish this Friday, July 7, the official unemployment data for the month of June. On that date, the ADP data that was now known would be confirmed.
Source: Ambito
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