Trump hails strong labor market amid immigration crackdown
The U.S. economy added 147,000 jobs in June, surpassing expectations and reinforcing President Donald Trump’s claims that his economic policies are driving robust growth despite geopolitical uncertainty and immigration restrictions. The unemployment rate unexpectedly fell to 4.1%, while average hourly wages climbed 3.7% year-over-year, according to Friday’s Labor Department report.
Economists had forecast a slowdown in nonfarm payrolls to 110,000 and a slight uptick in the jobless rate to 4.3%. Instead, June’s strong showing marked the fourth consecutive upside surprise, and April and May figures were revised up by a combined 16,000 jobs.
White House Press Secretary Karoline Leavitt celebrated the data, writing on X: “American-born workers have accounted for ALL of the job gains since President Trump took office… The economy is BOOMING again and it will only get better when the One, Big Beautiful Bill is passed and implemented!”
Immigration policy impact less severe than feared
Many economists had anticipated that Trump’s immigration crackdown would tighten the labor supply and drag down hiring, especially as the share of foreign-born workers has declined. However, private sector hiring remains resilient, and companies continue to absorb the change without significantly cutting back recruitment efforts.
June’s gains were broad-based, with notable hiring in healthcare, state and local governments. The labor market’s continued strength contradicts earlier warnings from Wall Street analysts who expected slower growth and potentially negative effects from shrinking immigration levels.
Rate cut prospects dwindle as inflation concerns linger
The hotter-than-expected jobs report complicates the Federal Reserve’s interest rate outlook. Chair Jerome Powell has been cautious about cutting rates too soon, citing uncertainty over how Trump’s sweeping tariffs may affect inflation. With inflation risks still looming and labor market momentum intact, most analysts now see no immediate need for rate cuts.
Short-term Treasury yields surged on Thursday, reflecting investor sentiment that the Fed will hold its benchmark rate steady at 4.25%–4.5% in July. According to CME Group’s FedWatch tool, markets are pricing in a 93.3% chance the Fed stays put.
Seema Shah, chief global strategist at Principal Asset Management, noted: “Today’s data completely dispels the case for imminent rate cuts… We expect the first cut to come in late 2025.”
