US Employment Data Shatters Market Expectations as Economy Shows Remarkable Resilience

Fresh employment figures from the US Department of Labour have demonstrated unexpected strength in the world’s largest economy, with 147,000 new positions created in June, significantly surpassing market forecasts of 110,000.

The unemployment rate witnessed a surprising decline to 4.1 per cent from 4.2 per cent, whilst average hourly earnings increased by 0.2 per cent month-on-month. The robust data has propelled both the S&P 500 and the technology-focused Nasdaq to unprecedented heights.

Market sentiment has markedly improved as President Trump’s controversial tariff policies have shown less severe impacts than initially predicted. John Waldron, Goldman Sachs president, characterised the US economy as “surprisingly resilient,” highlighting strong consumer spending and labour market performance. He drew stark contrasts with Europe’s “sluggish” outlook and China’s concerning deflationary pressures.

The positive employment figures have dramatically reduced expectations for Federal Reserve rate cuts. The probability of a July rate reduction plummeted from 24 per cent to 5 per cent, whilst September’s cut likelihood decreased from 78 to 64 per cent, according to CME Fedwatch data.

Despite President Trump’s vocal criticism of Federal Reserve Chairman Jerome Powell, whom he recently labelled a “fool” and “numbskull,” the central bank appears positioned to maintain its current stance. The Fed’s benchmark rate remains within the 4.25 to 4.5 per cent range, unchanged since December’s adjustment.

Wall Street analysts have reached a consensus that rate cut advocates will face disappointment at the upcoming July 30 meeting. The S&P 500 closed up 0.8 per cent at 6,279.35, marking its seventh record close this year, while the Nasdaq Composite rose 1 per cent to 20,601.10, achieving its fourth peak of 2025.