The U.S. added just 114,000 jobs in July, well below expectations for 175,000 and down from 179,000 in June. The unemployment rate rose to 4.3%, surpassing forecasts and the previous rate of 4.1% in June.
Reaction in traditional markets was notable, with the 10-year Treasury yield falling 15 basis points to 3.83%, the two-year yield dropping by 23 basis points to 3.93%, and stocks showing negative responses as Nasdaq futures went down 2.3% and S&P 500 down by 1.6%.
Average hourly earnings in July rose 0.2%, below expectations, and 0.3% in June. Average yearly earnings were up 3.6%, lower than the anticipated 3.7% and down from 3.8% in June. The average weekly hours also missed projections.
The market has already factored in a 25 basis point Federal Reserve rate cut in September, but there is increasing speculation for a 50 basis point cut. Traders are even betting on a total of 125 basis points in rate cuts by the end of the year, emphasizing more significant changes.
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