June Non-Farm Payrolls Report Exceeds Expectations

June Non-Farm Payrolls exceeded expectations on Friday with a headline figure of 287,000. The report was expected to show a rebound to 175,000 nonfarm payrolls, up from May’s disappointing 38,000 reading.

The official unemployment rate rose to 4.9 percent, from 4.7 percent. And after three months of rising wages, average hourly earnings ticked up again.

Average hourly earnings increased only two cents or 0.1 percent in June, while the year-on-year gain in earnings rose to 2.6 percent after advancing 2.5 percent in May.

The Dow Jones Industrial Average added more than 100 points after the report was released. The U.S. Dollar Index reversed losses to trade a quarter of a percent higher. The EUR/USD was trading near 1.1020 and the USD/JPY was near 100.90.

Treasury yields rose, with the 10-year yield around 1.41 percent and the 2-year yield near 0.63 percent. The 30-year yield was around 2.15 percent.

Traders are saying the news is not going to change monetary policy in the near-term because of the aftermath of the effects of the European Union referendum. Although the Federal Reserve will take encouragement from the new jobs data, they simply aren’t in a position to consider a rate hike at this time. There is still uncertainty around the world, but the U.S. economy has at least taken a step in the right direction.