The latest on markets and the lower-than-expected job numbers

Stocks fell Friday as investors worried that a cooler-than-expected jobs report still isn't enough to keep the Federal Reserve from continuing to raise interest rates.

All three major indexes are on pace to lose for the week.

The US labor market added just 209,000 jobs, the Bureau of Labor Statistics reported Friday. That's the lowest monthly gain since a decline in December 2020.

But the unemployment rate ticked down to 3.6% from 3.7%. Average hourly earnings rose 0.4%, unchanged from the previous month, suggesting that wage inflation, a major headwind for the Fed in its fight to stabilize prices, remains persistent.

That comes after US private sector businesses added an estimated 497,000 jobs in June, according to payroll processor ADP's latest National Employment Report, released Thursday.

"Today's data coupled with the blowout ADP earlier in the week probably locks in the Fed's case for more tightening," said Clayton Allison, portfolio manager at Prime Capital Investment Advisors.

Traders see a 95% chance the Fed will hike rates by a quarter point in July, according to the CME FedWatch Tool.

Meanwhile, shares of Levi Strauss fell 7.5% after the apparel company cut its full-year profit guidance on Thursday after the close.

Meta shares continued to gain on Friday, adding 0.1%, after it said that Threads, its new social platform, had received 30 million signups.

The Dow fell 96 points, or 0.3%.

The S&P 500 slipped 0.3%.

The Nasdaq Composite slid 0.1%.

The unemployment rates for Black and Hispanic workers rose last month after recently touching record lows. The jobless rate for Black Americans rose to 6% in June from 5.6% the prior month. For Hispanics, it ticked up to 4.3% from 4% during the same period.

The still-tight labor market has delivered some welcome gains for racial minorities through employment and wages. The Black unemployment rate reached an all-time low in May, narrowing the gap with the unemployment rate for white workers and the Hispanic jobless rate reached a record low last September. Black and Hispanic workers have also enjoyed robust wage gains.

But racial disparities persist and they could worsen as the Fed continues to raise interest rates this year. Officials expect two more quarter-point hikes in 2023.

The economy is still facing a number of headwinds such as the resumption of student loan payments, tougher lending standards, lingering bank stresses and the additional rate hikes. As the economy slows, any recent progress in economic racial disparities might be undone.

After months and months of stronger-than-expected US jobs data, labor market gains cooled off a bit in June. "Finally!" you could almost hear Wall Street traders exult.

Markets took a bit of a tumble Thursday after private payroll processor ADP reported a stunningly high number of job gains last month. The report historically has not been great at predicting the government's report, but it was still enough to send the Dow sinking 366 points Thursday.

The Federal Reserve has been trying to cool inflation for more than a year by jacking up interest rates. That should, in theory, cool off the job market. But a number of unique factors, including a historic labor shortage, have insulated the labor market from the Fed's machinations.

The strong job market has also given the Fed runway to continue to hike rates without worrying too much about plunging the economy into a recession. But stock traders don't like interest rate hikes, because they hurt companies' bottom lines, pressuring profit and weighing on share value.

Stock futures weren't exuberant Friday — after all, the United States added a healthy 209,000 jobs last month — but they largely held steady.

Dow futures were down 80 points, or 0.2%

S&P 500 futures fell 0.2%

Nasdaq futures were flat.

The labor force participation rate for women in their prime working age hit an all-time high in June, reaching 77.8%.

The participation rate for women between 25 and 54 years old hit a record high in April and then again in May, rebounding from the pandemic “she-cession” and returning to its pre-pandemic form of making progressively historic labor market gains.

In the years leading up to the Covid-19 pandemic, women’s labor force participation rates were rising faster than that of their male counterparts, Bureau of Labor Statistics data shows.

A confluence of several factors were behind those gains, notably: Female-dominated industries, such as health care and caregiving, were among the fastest-growing industries; educational attainment for women rose substantially; and women also made greater inroads into traditionally male-dominated fields such as construction, agriculture, and repair and maintenance.

By February of 2020, the labor force participation rate for prime working-age women was 77% — just shy of the record 77.3% set during the dot-com era, BLS data shows.

But by April 2020, that rate plummeted to 73.5% as the pandemic froze the US economy, forcing more than 20 million people out of their jobs. As the nation recovered in the coming months, however, women didn’t return at the same levels as men.

The pandemic walloped the leisure and hospitality and education and health services sectors, where women make up the majority of the workforce. Additionally, job losses and a lackluster employment recovery in the child care sector hampered workers’ ability to return to the labor market; and since caregiving responsibilities often fall to women, they were held back more as school became home-based.

The tide eventually turned.

The Federal Reserve would likely need to see monthly job gains of around 100,000 in order to hit pause again on its aggressive rate-hiking campaign, economists say.

While a quarter-point hike is expected at the Fed's next monetary policy meeting later this month, the September meeting is still a wild card. Officials will have another two job reports to parse through by then, and several pieces of crucial data on inflation.

There is "nothing" in today's employment report that changes expectations that the Fed has more work to do, said Joseph Davis, global chief economist at Vanguard, in a note Friday.

"Wage growth ticked up and remains well above levels the Fed would be comfortable with in their efforts to bring inflation back to 2%. Still strong growth in construction speaks to the lingering under supply in the housing market and the likelihood that the likely turning point in the business cycle will be different than those in the past."

The Fed will likely see this report as "largely consistent with its previous view of the job market and the economy," said Mark Hamrick, senior economic analyst at Bankrate.

"There is no cause for alarm over this decrease," said Dave Gilbertson, labor economist at UKG.

"Summer hiring started earlier than usual this year, and as a result we saw a remarkable level of growth reflected in May’s report," he said in a note Friday. "Fundamentally, I’m not seeing any cracks in the foundation of the labor market. In fact, UKG’s workforce activity data — as a more real-time gauge of what’s happening in the labor market — shows more strength and resilience than today’s jobs report might suggest. We continue to see the most consistent gains since the fall of 2021." 

However, good news for job creation can mean bad news for inflation, Gilbertson said.

"The level of job creation we saw in June strikes the right balance. That said, we should be prepared for this jack-in-the-box labor market to continue for the foreseeable future.” 

The US job market cooled off in June, adding just 209,000 jobs, the Bureau of Labor Statistics reported Friday.

June's total was lower than May's unexpectedly strong showing of 306,000, and below economists' expectations for a net gain of 225,000 jobs.

It's the lowest monthly gain since a decline in December 2020. 

The unemployment rate fell to 3.6% from 3.7% the month before, according to the report.

US employers have now added jobs for 30 consecutive months.

While the Federal Reserve has tried to cool the economy with 10 consecutive rate hikes, the labor market remains impervious to those efforts.

US stocks were muted Friday morning ahead of the closely watched monthly jobs report from the Labor Department.

Traders are bracing themselves for another upside surprise, just one day after private payroll processor ADP revealed a massive, unexpected spike in hiring activity in June.

While the Federal Reserve has rolled out an unparalleled and aggressive 10 consecutive rate hikes in its attempt to cool off the economy and bring down inflation, the labor market has continued to grow, adding 1.57 million jobs so far this year.

That's the 10th highest January-to-May total in records that go back to 1939, according to data from the Bureau of Labor Statistics.

Dow futures were down 5 points ahead of the morning trading session. S&P 500 futures hovered around 0.06% lower, and Nasdaq futures were down 0.2%.