The latest U.S. job data wasn’t quite what experts were expecting prompting a small decline in the markets on the last day of trading before the holiday weekend.
The U.S. created 223,000 new jobs in the month of June, lower than analyst expectations. On a positive note the U.S. unemployment rate dropped 20 basis points to 5.3 per cent, a seven-year low.
“The reaction has actually been muted for a couple of reasons,” said Chris Gaffney, president of EverBank World Markets Inc. in St. Louis. “We have a holiday weekend and traders are squaring up prior to the weekend and don’t want to take a big position. And of course you have the Greek referendum.”
Generally, the U.S. jobs picture is looking as strong as it’s been since the financial crisis but the one weak point that still haunts the country’s overall economic picture is the participation rate which reflects the number of working-age people in the workforce. It finished June at 62.6 per cent, the lowest rate since October 1977.
That said, analysts suggest that the Federal Reserve will press ahead with planned rate increases for later this year. That planned retreat from today’s level of economic stimulus stateside lends weight to Canadian predictions the Bank of Canada will move to raise its own overnight rate as soon as the economy stabilizes.