Payrolls miss forecasts

U.S. payrolls rose by 57,000 in June, far below expectations. The unemployment rate held at 4.2%, but the softer hiring pace pointed to a cooling labor market.

This report matters because payrolls are one of the cleanest reads on how much heat the economy has left. A weaker number usually pushes Treasury yields down, because traders think the Fed has less reason to keep pressing on the brakes.

That splits the market. Companies whose profits sit far in the future, and businesses tied to mortgages or borrowing costs, tend to get relief when rates ease; but travel, restaurants, housing-related spending, and discretionary retail can feel the squeeze if households become more cautious. Deposit-funded banks sit in the middle: lower rates can help funding costs, but weaker loan demand can offset that.

The key question now is whether June was a one-off soft patch or the start of a slower hiring trend. Watch the next payrolls report, wage growth, and labor-force participation: if jobs stay weak while participation keeps slipping, the “good news” for rates can turn into a bigger warning for demand.

Lower bond yields can make far-off future profits look more valuable today, which helps many high-growth technology names. The event is still only a modest boost, though, because the main driver is a change in valuation, not a big improvement in day-to-day sales.

loanDepot is highly sensitive to mortgage rates. The payroll miss pushed yields lower, which can revive refinancing and home-loan activity.