Missed payroll expectations and revised April and May numbers put the Fed in a tough spot for rate cuts.
June’s employment numbers showed almost no change from the previous month, as the Bureau of Labor Statistics reported a 4.2% unemployment rate and an estimated 57,000 nonfarm payroll jobs, roughly half the 115,000 economists expected.
At the same time, the agency also revised April’s and May’s total nonfarm payrolls down by 31,000 and 43,000 jobs, respectively.
According to BLS data, the financial activities sector experienced no job growth in June, after losing 22,000 jobs in May and 43,000 from the end of January. Meanwhile, healthcare and social assistance added the most jobs in June, with 46,600. Among the sectors with the largest job losses were leisure and hospitality (-61,000), information (-9,000), and retail trade (-7,500).
Sunnier Number
“We know it’s taking people longer to find work, but there are also signs of labor supply constraints in certain industries,” said Nela Richardson, chief economist at ADP, in the company’s National Employment Report for June. “For now, the overall effect is a slowdown in job creation.”
Using its proprietary methodology developed with Stanford Digital Economy Lab, ADP estimated that U.S. private employers added 98,000 jobs in June. Financial activities saw an increase of 14,000 jobs, placing it only behind education and health services (48,000) and trade, transportation, and utilities (15,000) in job creation.
Small businesses remain the largest source of hiring, with companies with 1-19 employees adding 38,000 new jobs. The companies with more than 500 employees added an additional 25,000 new positions. The companies that fell in between those sizes added 44,000 new jobs.
Doomed Rate Cuts
The revised April and May employment numbers and June’s lower-than-expected numbers reveal a softer labor market in the second quarter than previously thought.
The new figures have created a headwind for the Federal Reserve on possible rate cuts, as inflation remains close to its 2% target, according to the authors of a blogpost on the Curzio Research website.
“But a slowing labor market argues for cuts to support growth before conditions deteriorate further,” they wrote. “That is why the revisions matter. Every policy decision is only as good as the data behind it. If the Fed is reacting to numbers that keep getting weaker after the fact, it risks staying tight for too long.”
Most Asian stock markets dropped on Thursday, dragged down by a wave of selling in semiconductor shares, as European bourses made a subdued start and Wall Street looked set to open in the red before the release of key US employment figures.
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The pullback centred on the technology sector, where investors retreated from the chip stocks that have powered much of this year’s rally, amid growing unease that the vast sums Big Tech is spending on AI could leave the market awash with supply.
South Korea’s Kospi bore the worst of it, tumbling around 5% as its heavyweight chipmakers slid. Memory specialist SK Hynix lost close to 8% and Samsung Electronics fell more than 6%.
In Tokyo, the Nikkei 225 shed about 1.5%, with chip-equipment maker Tokyo Electron down around 5.6%, while Taiwan’s Taiex slipped 1.1% as TSMC, the world’s largest contract chipmaker, gave up 1.8%.
The falls followed a rough session for chip stocks on Wall Street this Wednesday, where Micron Technology dropped more than 10% and Intel sank around 9%.
The moves stand in sharp contrast to a stellar year for Asian tech, with the Kospi and the Nikkei still up roughly 85% and 34% respectively in 2026.
On the other hand, Hong Kong’s Hang Seng rose about 0.8%, lifted by an 8.7% jump in electric-vehicle maker BYD after it reported a second straight monthly rise in sales, while India’s Sensex added 0.5%.
In Europe, markets opened flat as both the Euro Stoxx 50 and the broader pan-European Stoxx 600 traded within a 1% range at the start of Thursday’s session.
The UK’s FTSE 100, Germany’s DAX 30, France’s CAC 40 and Spain’s IBEX 35, all traded between 0.1% and 0.3% higher.
Italy’s FTSE MIB led the pack and rose about 0.4%.
Oil extends its slide and US jobs in focus
Crude prices fell again, trading below where they sat before the Iran war began in late February, as hopes grew that supplies through the Strait of Hormuz will steadily recover.
Brent crude, the international standard, eased around 1% to about $70.89 a barrel while WTI, the US benchmark, dropped 3% to roughly $69.
Attention now turns to the US, where stock futures edged lower ahead of the June employment report, brought forward a day because of Friday’s Independence Day.
Economists polled by Dow Jones expect around 115,000 jobs were added last month.
The figure carries extra weight under the new Federal Reserve chair, Kevin Warsh, with investors wary that a strong reading could harden the case for keeping interest rates higher for longer.
According to economists at Capital Economics, demand for AI may keep growing but at a slower pace than many expect, a caution that helped sour sentiment towards the sector.
British American Tobacco (BAT) is to cut nearly a fifth of its global workforce as part of a major cost-cutting drive.
The company, which makes Lucky Strike and Dunhill cigarettes, is cutting 5,500 roles and outsourcing 3,500 more.
BAT did not say where the jobs being cut were located, but added that the US was not affected.
The cost-cutting programme is expected to save about £600m a year by 2028, it added.
The tobacco giant, which currently employs 47,000 people globally, had previously announced a savings drive that would involve making it “more digital and AI-focused”.
Traditional cigarette sales are shrinking as smokers increasingly switch to vapes and nicotine pouches.
BAT is shifting its focus to smoking alternatives such as its Vuse vapes and Velo nicotine pouches to drive growth, but its sales and profit margins have been sluggish in recent years.
Sales in the US — its biggest market — have also been hit by the cost of living, as smokers swap for cheaper brands.
Additionally, the company is battling rising duties and stricter regulations in some markets.
BAT said the job cuts, which have already started, are set to be completed by the end of this year.
Chief executive Tadeu Marroco said the cuts would make the company “more agile, cost disciplined and technology enabled”.
“These changes affect many of our colleagues, and we are focused on supporting them through this transition with care and respect, as we position the business for the future.”
The Bank of England left its benchmark interest rate unchanged at 3.75% on Thursday, extending a pause that began in December 2025, as policymakers weighed the inflationary fallout from the Iran war against signs of resilience elsewhere in the economy.
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Governor Andrew Bailey and fellow Monetary Policy Committee members were widely expected to keep rates on hold and maintain a broadly neutral stance on future policy moves.
The decision came a day after official figures showed UK inflation holding steady. Consumer prices rose 2.8% year-on-year in May, unchanged from April and below economists’ expectations of 3.0%, leaving the headline rate at its lowest level since early 2025.
However, the stable reading masked diverging trends beneath the surface. Transport costs accelerated sharply to 6.8%, driven by higher fuel prices and rising air fares, while food inflation eased to 2.2% and housing costs continued to moderate.
Though inflation remains above the bank’s target of 2%, the figure raised hopes that the upward pressure on prices emanating from the spike in oil and gas prices after the start of the Iran war on 28 February may have been less than anticipated.
Andrew Bailey, the bank’s governor, said the recent fall in oil prices has been “encouraging” while noting they are still higher than before the war.
“Whatever happens in the future, the higher energy prices of the past four months mean there’s already some inflationary pressure in the pipeline,” he said. “The Bank’s job is to make sure that doesn’t turn into sustained inflation above our 2% target.”
Analysts also cautioned that inflation could still accelerate later this year, as higher household energy bills feed through to prices. Lindsay James, investment strategist at Quilter, said: “Whilst inflation was below expectations in May and currently under 3%, it is still likely to jump closer to 4% later in the year due to the coming impact of a higher energy price cap.”
James added that while oil prices have retreated from recent highs, they remain above last year’s levels, suggesting underlying inflation pressures have not fully disappeared.
The decision to hold the key interest rate was not unanimous, with two of the nine Monetary Policy Committee members voting for a quarter-point rate increase, reflecting concerns that higher energy costs could still feed through into broader inflation pressures.
A labour market losing momentum
Thursday’s labour market release painted a mixed picture.
The unemployment rate dipped unexpectedly to 4.9% in the three months to April, down from 5.0% in the first quarter, yet payrolled employee numbers fell over the period, pointing to an underlying loss of momentum even as the headline jobless rate improved.
Wage growth, a metric the Bank of England watches closely for signs of persistent price pressure, held firm, with regular pay excluding bonuses rising 3.4% on the year.
“The labour market is still continuing to lose momentum, with the latest figures showing a further cooling,” stated Richard Carter, head of fixed interest research at Quilter Cheviot.
Sanjay Raja, chief UK economist at Deutsche Bank, struck a similar note, cautioning that “it’s clear that the labour market is not out of the woods yet,” though he added that the mixed data buys the committee more time to wait and see how the economy evolves.
The combination of cooling headline inflation, a softening jobs market and still-robust pay growth underscores the bind facing the committee. Strong earnings keep alive the risk of so-called second-round effects, where higher wages feed back into prices, even as hiring loses steam.
US President Donald Trump hailed stronger-than-expected jobs growth before pivoting to Iran, saying negotiations with Tehran “seem to be going quite well”. Trump offered no further details on the talks as he arrived in Wisconsin for an agriculture event.
Financial sector jobs grew in April, but a record wage gap challenges the industry’s recovery.
There might be a light at the end of the tunnel for job safety in commercial banking — or it could be the light of an oncoming train.
After more than 12 months of continuous job losses, commercial banks may be turning the corner. The ADP National Employment report for April 2026 noted that the financial activities sector grew by 9,000 positions, 5,000 more than the previous month.
The sector added the fourth-most jobs, behind education and health services (61,000); trade, transportation, and utilities (25,000); and construction (10,000). Only professional and business services saw a decline, with 8,000 jobs lost in April.
Meanwhile, the Bureau of Labor Statistics (BLS) is both more bullish and bearish compared to the ADP findings. The BLS calculated that the economy added 115,000 non-farm payroll jobs in April, while ADP saw private sector employment increase by 109,000 jobs, based on the anonymized weekly payroll data of more than 26 million private-sector employees.
On the other hand, BLS noted that employment in financial activities “showed little change over the month.”
AI Warning
The slight upswing seen by ADP could be a reversal of monthly job losses in commercial banking from February 2025, according to research by KBRA Financial Intelligence (KFI). But there’s a catch.
“Recent declines have been markedly narrower than those recorded in 2023 and 2024, suggesting that a consolidation of the commercial banking workforce could be slowing, but the ongoing implementation of AI within the industry could continue to shrink headcount at some banks,” according to a KFI Insight report.
Growth Spurt
So, where’s the greatest job growth? At the smallest and largest organizations.
The micro/small (1-19 employees) and large enterprises (more than 500 employees) led in job growth, with 43,000 and 42,000 positions, respectively. Only companies at the upper end of the mid-sized enterprise range (250-499 employees) cut, jettisoning 3,000 jobs in April.
“Small and large employers are hiring, but we’re seeing softness in the middle,” said Dr. Nela Richardson, chief economist at ADP. “Large companies have resources to deploy, and small ones are the most nimble, both important advantages in a complex labor environment.”
Wage Worries
It’s not all good news. According to Bank of America Institute, which bases its numbers on aggregated and anonymized bank transaction data, unemployment payments continued to slow, but a large K-shape in wage growth continued into April.
“In April, higher-income households saw their after-tax wage growth rise to 6.0% year-on-year (YoY) — the highest rate we’ve observed since August 2021,” wrote the authors of the April 2026 Employment Report from the Institute.
“In fact, even within this cohort, there is a divergence, with after-tax wage growth for the highest 5% of households by income stronger than that of the rest of the higher-income cohort,” the authors noted.
“Middle- and lower-income households also saw increases in their after-tax wage growth in April, to 2.3% YoY and 1.5% YoY, respectively,” the researchers found. “But the gap between these cohorts and higher-income households remains at its widest level since our data series began in 2015.”
When political commentator Ana Navarro recently arrived at Mercado Little Spain, the José Andrés-owned food hall downstairs from CNN’s New York studios, a seat was ready for her constant companion, a rust-colored miniature poodle named ChaCha.
“I am her service human because I’m servicing her all day,” Navarro said of the well-behaved pooch who has been by her side since the 2020 COVID-19 lockdown.
As Navarro and a reporter order tapas dishes for the next two hours, patrons at nearby tables raise their cellphone cameras. Andrés’ daughter Carlota stops by and gives an update on her father, a Navarro pal. Later, a Spanish-speaking young woman comes over and thanks Navarro, a political exile from Nicaragua, for defending immigrants amid the aggressive deportation efforts of the Trump administration.
In a fragmented media world where critical mass is becoming harder to attain, Navarro has become one of media’s most recognizable political talking heads thanks to her two high-profile TV roles.
She is a co-host of ABC’s “The View,” the No. 1-rated daytime talk show that has become a target in Federal Communications Commission Chairman Brendan Carr’s efforts to discipline President Trump’s broadcast media critics. She is also a regular panelist on CNN’s roundtable program “NewsNight with Abby Phillip,” which extends its reach far beyond its modest ratings through frequent viral clips on social media.
In February, Navarro, 54, joined the growing list of media personalities who have launched a digital platform to reach consumers no longer watching traditional TV with a weekly podcast for iHeart called “Bleep! With Ana Navarro.”
Navarro is her uncut self on “Bleep!” She interviews guests but can also go into a 30-plus minute monologue without a script when she records at iHeart’s midtown Manhattan studios, where ChaCha looks on from a cushy pillow.
Navarro delivers her arguments against the Trump administration as if she’s schmoozing with friends across a kitchen table. She always appears calm but as the podcast title suggests, she serves up a few four-letter words she doesn’t use on TV.
“Bleep!” gives Navarro her own platform at a time when the legacy media networks she works at are under pressure. Upheaval is expected at CNN if parent company Warner Bros. Discovery becomes a part of Paramount and its Trump-friendly owners David and Larry Ellison.
Carr recently called for an early review of ABC’s TV station licenses. He said its related to an investigation into parent company Disney’s diversity practices but it comes amid the administration’s criticism of the network’s Trump coverage, which has included “The View.”
Ana Navarro on the set of ABC’s “The View.”
(Lou Rocco (ABC))
Navarro was pulled into the fray last year when she was approached by Walt Disney Co. Chief Executive Bob Iger at ABC’s upfront advertiser presentation in New York. The huddle led to reports that they discussed the anti-Trump commentary on “The View.”
“We had an honest conversation but I’m not going to tell you what it was,” she said. “Nobody is muscling us. All I’ve got to do is show up and do the same thing that I’ve always done, which is be as truthful, and authentic and informed.”
(On Friday, ABC filed a petition with the FCC over the agency’s recent scrutiny of “The View,” and whether the program qualifies for an exemption from seldom enforced equal time rules for political candidates. The network accused the FCC of actions violating its 1st Amendment right to free speech.)
Navarro has been pounding at Trump for so long, it’s hard to remember that her rise as a TV pundit began 14 years ago when she was a loyal conservative Republican. Jeff Zucker, who ran CNN from 2012 to 2022, said her personal evolution sets her apart from other pundits.
“She’s funny, insightful, knows how to turn a phrase and she’s gone on a political journey,” Zucker said in a recent interview. “So she understands the entire political spectrum as well as anyone.”
Navarro was eight years old in 1980 when her family fled Nicaragua and sought political asylum in the U.S. after the socialist Sandinista National Liberation Front took power. Her father stayed behind to fight with the anti-communist rebel Contras in the country’s civil war.
“Reagan was taking on the Sandinistas when Bernie Sanders wasn’t,” she said.
She was granted amnesty and became a U.S. citizen under the immigration reform bill signed by President Reagan in 1986.
Growing up in Miami, Navarro was part of the enclave of Latinos whose political perspectives were shaped by having fled Fidel’s Castro’s Cuba and other communist regimes in Latin America. She became a political operative in Republican politics, starting in local Miami races and eventually served as national Hispanic chair for 2008 GOP presidential nominee John McCain. Her Cuban-born husband, Al Cardenas, was on Reagan’s transition team and once led the Republican Party in Florida.
Navarro watched in dismay in 2015 when Trump came down the escalator of the midtown Manhattan skyscraper that bears his name to announce he was seeking the Republican presidential nomination. “Calling Mexicans rapists and criminals — that just hurt my heart,” she said.
When Trump mocked a disabled journalist during a campaign rally, Navarro was reminded of family struggles with one of her older brothers, who has non-verbal autism and is self-injurious. “That brought back so much outrage and anger,” she said. “For me that was a line I could never forgive.”
But being an anti-Trump Republican has become a lonelier job in recent years as the party establishment’s support solidified behind Trump during the historically successful campaign in 2024 that returned him to the White House. For Navarro, it has meant the end of many long-standing relationships.
“I’ve lost some very close friends over Donald Trump,” she said. “And I’ve had to make peace with that. They feel that I’ve betrayed the Republican Party. Some of them think I’m an opportunist, doing this for today.”
One of those friends is Secretary of State Marco Rubio, who she’s known her entire adult life. Navarro still has his cell number in her contacts, but it’s been awhile since she’s called. She still respects Rubio‘s credentials in foreign policy but doesn’t see herself ever supporting him if he runs for president.
“Unless he was running against Satan incarnate, no, I would not go over to him,” she said.
Navarro keeps her cool on “NewsNight,” which occasionally erupts into bedlam when guests clash with Scott Jennings, the show’s resident MAGA Republican. But she misses the days of sparring with Democratic operative Donna Brazile when they were on opposing sides on CNN’s Washington set, and then went out for oysters and wine at Old Ebbitt Grill afterward.
“It’s a completely different world than it was,” Navarro said.
The highly self-confident Navarro has always spoken her mind, encouraged by her father and the Sacred Heart nuns who operated her private school in Miami where she still resides. “Those nuns could run Fortune 500 companies,” she said.
She is not afraid to draw on her own painful, personal experiences to deliver a point. Another older brother died of a heart attack at age 38. Her cousin’s son was a fatality at the 2016 Pulse night club shooting in Orlando, Fla.
“I refuse to live in hopelessness and trauma,” she said. “The things I’ve gone through have shaped me into who I am and made me resilient and empathetic. One of the reasons I abhor Donald Trump is because he completely lacks empathy.”
Where Navarro often separates herself from most Democrats is foreign policy. When Venezuela President Nicolás Maduro was ousted and arrested by U.S. forces, Navarro, on holiday in Madrid, joined exiles from the country as they celebrated in Puerta del Sol.
Navarro expects to have the same reaction if Trump makes good on his threats to end Cuba’s communist regime.
“I will go out there with my metal pan and my metal spoon and I will bang the drums in joy,” she said.
A fragile ceasefire may have paused the US-Israeli war on Iran, but the economic cost is crippling the daily lives of Iranians. The US is blockading Iranian ports, while the price of goods skyrockets and businesses struggle to keep employees.
