From the Desk - Economic Commentary
Brandon Casey, Member Strategies - 7/2/2026
U.S. equity markets are trading higher this morning as investors react to an employment report that was weaker than expected. The report has reduced concerns about additional Federal Reserve tightening in the near term. All three major averages are on track to finish the holiday-shortened week higher, with the DJIA notching another record high this morning.
The June employment report showed that U.S. employers added 57,000 nonfarm payroll jobs, substantially below expectations of 115,000 and down from a revised 129,000 increase in May. Prior months were revised lower by a combined 74,000 jobs, further indicating a slowdown in hiring momentum. The unemployment rate fell to 4.2% from 4.3% and the labor force participation rate fell to 61.5%, its lowest level since March 2021. Wage growth remained relatively stable, with average hourly earnings increasing 0.3% during the month and 3.5% over the last year.
Initial jobless claims declined to 215,000 for the week ending June 27, down from 216,000 the prior week and below expectations of about 220,000. Meanwhile, continuing claims increased to 1.814 million, up from 1.812 million the previous week and the highest level in roughly three months. The increase in continuing claims suggests that while employers are generally retaining workers, unemployed individuals may be taking longer to find new positions.
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