US jobs growth dashes hopes of July rate cut

HOPES DASHED

Hopes of a US interest rate cut later this month appeared to have been dashed after better-than-expected official jobs figures, writes John-Paul Ford Rojas. Pic: Andrew Harnik/Getty Images

NEW JOBS BEAT FORECAST

Closely-watched non-farm payrolls data showed the world’s biggest economy added 147,000 jobs in June, beating economists’ forecast of 110,000. Pic: Getty Images

DARK CONTRAST FOR UK

In contrast, the UK labour market darkened, adding to predictions of a Bank of England rate cut this summer. Experts said the US figures closed the door on the possibility of the US Federal Reserve cutting rates this month. Pic: Getty Images

'STUPID PERSON'

The central bank has come under intense pressure to make cuts from President Donald Trump, who even resorted to personally insulting Fed chief Jerome Powell as a "stupid person" and "numbskull". Pic: Andrew Harnik/Getty Images

THE 'WAIT AND SEE' APPROACH

It has so far resisted, taking a "wait and see" approach to the impact of Trump’s tariffs on inflation and growth. Pic: Getty Images

CHANGE OF HEART

Recently, key officials had seemed open to a change of heart, to head off a downturn in the labour market, but yesterday’s figures appear to quash that possibility, which was raised by the Fed’s governing board members Christopher Waller and Michelle Bowman. Pic: Al Drago/Bloomberg via Getty Images

'IT COMPLETELY DISPELS THE CASE'

Seema Shah, chief global strategist at Principal Asset Management, said: 'Today’s data of higher-than-expected payrolls, a drop in unemployment rate and a fall in jobless claims completely dispels the case for imminent rate cuts.' Pic: Getty Images

CENTRAL BANKERS' WORRIES

In Britain, central bankers’ worries about jobs are backed up by data, and markets see an 80 per cent chance of a Bank of England rate cut, from 4.25 per cent, next month. Yesterday, a monthly purchasing managers’ index business survey showed employment in the UK’s dominant services sector fell for the ninth month in a row. Pic:sukanya sitthikongsak/Getty Images

SECOND QUATER OUTLOOK

And while overall private sector growth picked up pace in June, growth for the second quarter is expected to be much slower than the robust 0.7 per cent pace seen at the start of the year. Pic: Andrew Harnik/Getty Images

AN AUGUST RATE CUT?

Thomas Pugh, chief economist at accountancy firm RSM, pointed to likely growth of just 0.2 per cent in the April-June period. That, together with evidence of reduced price pressure, "makes a rate cut in August even more likely," he said. Pic: Shutterstock

'HAPPY DAYS'

Rob Wood, chief UK economist at Pantheon Macroeconomics, said: ‘Happy days as growth improves and inflation slows; the MPC [the Bank of England’s monetary policy committee] could welcome the news with another cut in August.' Pic: Mike Kemp/In Pictures via Getty Images)