MTS Help Center

The Labor Department reported employers added 287,000 workers in June, driven in part by stronger hiring by restaurants, retailers, and health-care providers. May job growth was revised down, to 11,000 from 38,000. The number of people working part time in June who would have preferred full-time employment plunged to the lowest level since October, helping to unwind the negative news from May.

Investors upped the probability of a rate hike by December to around 25 percent following the data, according to pricing in federal funds futures contracts, compared to 12 percent on Thursday.

Omair Sharif, senior U.S. economist at Societe Generale in New York, said the Fed won’t overreact to one strong report any more than it would to a single weak one, but that the trend pace for new jobs in 2016, while lower than 2015, is still positive. Monthly non-farm payroll gains averaged almost 230,000 in 2015 and are running at 172,000 so far this year.

“That’s more than enough to absorb growth in the labor force and put downward pressure on unemployment,” said Sharif. “Even with the slowdown, this is more than good enough for Fed officials.”

“There will be enough clarity in September” for the Fed to raise rates “if clarity is what they are actually looking for,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd in New York. “Pressures are building here -- the unemployment rate is down below 5 percent.” Rupkey forecasts rate increases in September and December.

The Fed next meets on July 26-27 and then Sept. 20-21. A final meeting before the November presidential election will take place Nov. 1-2.

“It doesn’t mean the Fed will move any sooner,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh. “They’re going to wait to see evidence that the third-quarter growth in the U.S. held up” and until after the election, he said.

Hoffman stuck with his expectation that the Fed will raise rates in December.

Crude prices edged down in early Asian trade on Monday to hold near two-month lows on seasonally weak consumption, despite comments from the Saudi Arabian oil minister that the oil market was becoming more balanced.

London Brent crude for September delivery was down 22 cents at $46.54 a barrel by 2247 GMT on Sunday. It settled up 36 cents on Friday after the U.S. economy posted the largest job gains in eight months in June and on worries about fresh militant attacks on Nigerian oil infrastructure.

NYMEX crude for August delivery was down 27 cents at $45.14 a barrel, after closing up 27 cents on Friday.

Saudi Arabia's energy minister Khalid al-Falih said on Sunday the oil market was becoming more balanced and prices were stabilizing, echoing earlier comments made on Monday.

Oversupply concerns, however, resurfaced on Friday with data showing the U.S. oil rig count rose by 10 as drillers added rigs for a fifth week in six as analysts predict production will start to edge up early next year.

Reference: Reuters, Bloomberg