Job growth accelerated at a much faster pace than expected in June, indicating that the main pillar of the U.S. economy remains strong despite pockets of weakness. Nonfarm payrolls in June increased by 372,000, topping the 250,000 estimate. The unemployment rate remained at 3.6% Average hourly earnings rose 5.1% from a year ago, a touch faster than estimates. Education and health services led job creation, followed by professional and business services and leisure and hospitality.
Treasury yields are rising again as traders digested strong numbers in the latest jobs report that is likely to keep the Federal Reserve aggressive against inflation. The strong report would likely mean another sharp interest rate hike in July as the Federal Reserve focuses on bringing down inflation. On Thursday, two Fed officials — Christopher Waller and James Bullard — emphasized their support for another 75-basis-point increase this month.
Already up a hefty 7% last year, the dollar has soared another 12% this year, consistently exceeding nearly every forecaster's expectations on how long its winning streak would last. The greenback's strength will be most acutely felt by the ones who have little to no interest rate backing them.Indeed, the euro, the Japanese yen and the British pound, whose central banks have either not hiked rates or failed to keep up with the Fed's aggressive policy tightening, have weakened by double-digit percentages this year.