In depth analysis of the June 2025 non farm payroll report: “False fire” cannot conceal hidden employment concerns

1、 Non farm Summary

In June 2025, the non farm payroll data in the United States exceeded expectations on the surface but remained structurally weak, with 147000 new jobs added (expected 110000, revised from the previous value of 144000), the unemployment rate dropping to 4.1% (expected 4.3%), and wages increasing by 3.7% year-on-year (expected 3.8%). Despite strong headline data, the private sector only added 74000 people, the lowest level since October 2024, and the government sector contributed nearly half of the new employment (73000 people), mainly concentrated in the state and local education sector.

There is a statistical “water” in the decline of unemployment rate: if the newly added 256000 “Disappointed Workers” are included, the unemployment rate will rise to 4.261%, which is more in line with the gradually weakening trend of the job market. Salary growth has slowed to its lowest level since July 2024, indicating a marginal easing of inflationary pressures, but may suppress consumer demand.

2、 Interpretation of Small Non Agricultural ADP and Large Non Agricultural ADP

In June, the number of small non farm ADP employment unexpectedly decreased by 33000 (expected+98000), marking the largest decline since March 2023, and the service industry employment suffered the largest contraction since the epidemic. The difference between this and non farm sectors is mainly due to the expansion of government departments (such as the surge in state/local education positions) and differences in statistical methods: ADP only covers the private sector, while non farm sectors include government employment and household surveys show a decrease in unemployment rates.

After the data was released, the market’s probability of a rate cut in July plummeted from 23.8% to 5.2%, the US dollar index rebounded to 97.04, and the 10-year US Treasury yield climbed to 4.25%, causing spot gold to plummet nearly $40 in the short term to $3311.5 per ounce, ultimately closing down 1.1%. However, long-term support factors for gold, such as global central bank purchases and changes in the US dollar credit system, have not been disrupted.

3、 Historical Non Farm Data Chart

Trend of unemployment rate: The adjusted unemployment rate from January to June increased from 4.011% to 4.261%, indicating a gradual weakening of the job market cushion.

Non farm employment correction: The total non farm data for April and May was revised upwards by 16000 people, indicating an underestimation of labor market resilience.

Salary growth slows down: The year-on-year salary growth rate in June hit a new low since July 2024, reflecting marginal easing of inflationary pressure.

4、 The views of relevant institutions or banks

Huatai Securities: Non farm payroll exceeded expectations in June, but private sector employment slowed significantly, maintaining the Federal Reserve’s two precautionary interest rate cuts from September to December.

CITIC Securities: The ‘buffer pad’ in the job market is limited, and it is expected to cut interest rates at the September interest rate meeting.

China International Capital Corporation: Non farm resilience does not support early interest rate cuts, and the next interest rate cut may be postponed to the fourth quarter.

Federal Reserve official Bostic: The current wait-and-see approach is appropriate, and the lagged impact of tariffs on inflation needs to be evaluated.

New Federal Reserve News Agency Timiraos: Non farm data strengthens wait-and-see stance, with only a 5.2% chance of a rate cut in July.

5、 June 2025 Non Farm Trading Reminder

Spot gold:

Strategy: For details, please refer to the column “Exclusive Opinion”

Logic: Non farm data suppresses expectations of interest rate cuts, while the strengthening of the US dollar suppresses gold prices in the short term; On a technical level, the daily closing price fell below the 21 day moving average, and the hourly level is bearish.

Spot silver:

Strategy: For details, please refer to the column “Exclusive Opinion”

Logic: After the non farm period, silver recovered some of its losses, and the support of the 20 day moving average was effective, breaking through the oscillation range at the hourly level.

6、 Non farm Weekly Other Important Market Information

Tariff Policy: The United States will impose a 50% tariff on steel and aluminum products starting from June 23, which may drive up manufacturing costs and consumer prices, exacerbating inflationary pressures. Attention should be paid to the June CPI data released on July 15th (expected overall month on month ratio of 0.33%, core of 0.42%).

Geopolitics: The situation in the Middle East has eased due to the resumption of US Iran nuclear negotiations, but the ongoing conflict between Palestine and Israel (with over 57000 deaths in the Gaza Strip) still poses potential risks.

Federal Reserve Policy Trends: The June meeting maintains interest rates unchanged, and the market focuses on the assessment of the impact of tariffs at the July 29-30 meeting.

US Treasury yield: The 10-year US Treasury yield has climbed to 4.25%, suppressing the attractiveness of interest free asset gold in the short term, but in the long run, attention needs to be paid to the lagging impact of “normalization of high interest rates” on the economy.

Market closure: Due to Independence Day in the United States, the gold and foreign exchange markets will close early at 1am on July 5th, and attention should be paid to changes in liquidity.

Risk Warning: The surface strength of non farm data may mask structural issues in the job market, and geopolitical and tariff policy uncertainties may exacerbate market volatility. Investors need to dynamically adjust their positions based on their own risk tolerance.