CICC: Resilient Nonfarm Payrolls Do Not Support Early Fed Rate Cuts

ChainCatcher News, according to Jintou Data, a research report from CICC states that the US added 147,000 non-farm jobs in June, surpassing the market expectation of 110,000. The unemployment rate fell from 4.2% to 4.1%, indicating that the labor market remains resilient. Although uncertainty around tariffs has reduced labor demand, the tightening of immigration enforcement has also slowed labor supply, which has curbed the rise in the unemployment rate.

In addition, there may be a skills mismatch in the labor market: on one hand, government layoffs and the rapid development of artificial intelligence have led to a surplus of "white-collar" workers; on the other hand, stricter immigration policies have resulted in a persistent shortage of low-skilled workers. Under this structural mismatch, the unemployment rate may not rise significantly in the future. CICC believes that the June non-farm payroll data does not support an early rate cut by the Federal Reserve. We maintain our previous view that the next rate cut may not occur until the fourth quarter, after the price increases caused by tariffs have subsided.