#非农爆冷打压加息预期 Non-farm payroll data fizzles, rate hike expectations reverse

In June, U.S. non-farm payrolls added only 57k, far below expectations, with the three-month average plummeting to 111k; the market's perceived reasons for rate hikes have disappeared—falling oil prices, cooling wages, core PCE potentially being revised down by 20 to 30 basis points, as multiple inflationary pressures subside simultaneously.

Fed rate hike expectations cool
The U.S. Department of Labor released June non-farm payroll data, showing seasonally adjusted non-farm payroll employment increased by 57k, well below market expectations; the June unemployment rate was 4.2%, lower than expected; June hourly wages rose 0.3% month-over-month, in line with expectations. After three consecutive months of exceeding expectations, U.S. June non-farm payroll additions were far below market expectations, with significant downward revisions to prior data, and the breadth and quality of new employment declined. The World Cup's boost to the leisure and hospitality industry faded this month. At the same time, the unemployment rate fell more than expected, driven by a simultaneous decline in the labor force participation rate, i.e., the drop in unemployment was more due to labor supply withdrawal than labor demand recovery. The current U.S. job market is not worsening in a "layoff wave" fashion but is in a weak absorption state of "low hiring, low layoffs." Wages have not yet formed a new inflation constraint; average hours worked oscillate at low levels, hourly wage growth is moderately declining, and the wage-price spiral has not strengthened. Before the specific research results from the five panels appointed by Walsh are released, it may be difficult for the Fed to push forward further monetary policy actions. At the June FOMC meeting, Fed Chair Walsh announced the formation of five panels, each responsible for Fed communications and other topics, requiring completion of related research by the end of 2026. Of course, in terms of market expectations, expectations for rate hikes depend on economic data. The June average non-farm payroll addition was 111k, at a relatively high level, consistent with leading indicators (NFIB hiring intentions). Looking ahead, it is expected to be around the equilibrium level of 0-50k in the coming months. Additionally, considering the recent sharp drop in oil prices, inflation may have reached its year-high in May, and the short-term (July-September) pressure on the Fed to raise rates may be significantly alleviated. It is highly probable that the Fed will keep rates unchanged for the rest of the year.

PMI returns to expansion territory
In June 2026, the manufacturing PMI stood at 50.3%, up 0.3 percentage points from the previous month, above the Bloomberg consensus median of 50.1%, returning to expansion territory; the non-manufacturing business activity index was 50.2%, up 0.1 percentage points from the previous month, above the Bloomberg consensus median of 49.9%. The manufacturing PMI's above-seasonal recovery confirms "policy efforts, no slack in off-season," with the acceleration of special bonds and other policy implementations offsetting seasonal pressures, and the economic cycle bottom may have been consolidated. In June, manufacturing PMI rose 0.3 percentage points to 50.3%, showing signs of economic recovery. In June, special bond issuance exceeded 570 billion yuan, a significant acceleration from less than 200 billion in each of April and May. The conversion of fiscal funds into real work accelerated, coupled with the early release of trade-in funds, effectively offsetting the downward economic pressure in the off-season. Significant demand improvement supported manufacturing PMI's return to expansion. In June, the production index stood at 51.4%, up 0.2 percentage points from the previous month; the new orders index stood at 51.2%, up 1.3 percentage points from the previous month, with demand improvement far exceeding production, mainly driven by the 618 e-commerce promotion and a new round of consumer trade-in programs; the new export orders index rose to 50.1%, up 1.5 percentage points from the previous month, mainly due to improved external demand amid easing geopolitical tensions and rapid growth in AI export demand; the purchase volume index rose to 51.4%, up 1.6 percentage points from the previous month, indicating stronger inventory replenishment intentions. High-tech manufacturing and emerging industries continue to lead, while the consumer goods sector stabilizes at the bottom. The high-tech manufacturing PMI stood at 53.5%, up 0.6 percentage points from the previous month, staying above the threshold for 16 consecutive months; the equipment manufacturing PMI stood at 52.5%, up 0.4 percentage points; the consumer goods industry PMI stood at 50.2%, up 0.5 percentage points, returning to expansion. Although the EPMI for emerging industries fell seasonally by 2.5 percentage points to 50.4%, it remains in expansion territory, with E-services in healthcare, E-services in business consulting, and next-generation information technology performing best. Price indexes fell from highs, the upstream-downstream spread narrowed, but profit margins in mid-to-downstream sectors remained under pressure; a surge in medium-sized enterprise sentiment became a highlight, while small enterprises continued to weaken. The PMI purchase price index fell from 60.5% last month to 54.2% this month, and the PMI ex-factory price index fell from 51.9% to 48.2%, falling below the boom-bust line, narrowing the upstream-downstream spread. Prices showed structural divergence: upstream oil, chemicals, and non-ferrous metals continued to fall, non-metals fluctuated, ferrous metal prices rose to 88.7% (a 59-month high), while downstream consumer prices generally rose. At the enterprise level, the PMI for large enterprises stood at 50.7%, down 0.4 percentage points from the previous month; the PMI for medium-sized enterprises rose by 1.9 percentage points to 50.5%, returning to expansion; the PMI for small enterprises continued to fall to 48.2%, down 0.3 percentage points from the previous month. It is expected that the upward trend in the economic cycle will remain unchanged in the third quarter, and the pace of economic recovery depends on the strength of stable growth policies.
Key points to watch in the second half of the year:
First, whether the acceleration of special bonds and urban renewal investment can sustain real work output;
Second, the sustainability of export order improvements and tariff disruptions;
Third, whether the 3 percentage point rebound in non-manufacturing new orders can translate into actual business improvement;
Fourth, whether small enterprise sentiment can stabilize.

Commodity markets lack fundamental drivers
Although Fed rate hike expectations have cooled, it may only benefit a few sectors previously suppressed by liquidity, such as precious metals. Most commodities still face a weak macroeconomic fundamental and are in a relatively range-bound market.