The nonfarm payrolls number is in at 195,000, much higher than economists were expecting after last month's 175,000 jobs added (seasonally adjusted). Analysts had anticipated 165,000 extra jobs this month.
But the unemployment rate is flat at 7.6 per cent, despite forecasts of a fall to 7.5 per cent.
Markets are so focused on this number because a successive falls (and corresponding drop in unemployment) could mean that the Federal Reserve starts tapering quantitative easing, and liquidity could dry up.
For all the improvements in NFP, the fact is that unemployment is higher, growth is lower and PCE is in the pit. Tapering is not coming soon— World First (@World_First) July 5, 2013
Comment from Capital Economics:
Any doubts (or hopes!) that the Fed wouldn’t follow through on its plan to taper QE3 later this year in response to some of the recent weaker activity data were dealt a major blow by the 195,000 increase in payroll employment in June. The resulting 20 basis point leap in 10-year Treasury yields suggests the markets are fast adopting our view that QE3 tapering will begin in September.