Yesterday’s U.S. nonfarm payrolls report came in above expectations, but a closer look at the details reveals a less encouraging picture. Despite the headline beat, market reactions quickly faded. For instance, gold initially dropped from 3350 to 3311 in the first 15 minutes after the release but has since recovered more than 75% of that decline. So why is the June jobs report not as strong as it first appeared? 

(June 2025 Jobs Report) 

According to the BLS report, nonfarm payrolls increased by 147k in June, surpassing the consensus estimate of 106k. However, when breaking down the numbers, private payrolls rose by just 74k, well below expectations. Most of the gains came from government and healthcare hiring. Government jobs accounted for 73k new positions, and 63k of those came from the education sector alone. 

Some analysts suggest the high net hiring in education may be due more to a lack of firings, a consequence of a tight labor market in that sector. Meanwhile, the 59k increase in healthcare jobs is part of a long-term trend. Over the past two years, the U.S. has added an average of 70k healthcare jobs per month. This growth is largely driven by the needs of an aging population and reduced payrolls during and after the pandemic that have yet to fully recover. 

If you exclude government and healthcare hiring, U.S. payrolls increased by just 15k in June. 

The unemployment rate also came in better than expected, falling to 4.1% from 4.2%, while markets had anticipated a rise to 4.3%. However, this decline was driven by a drop in the labor force participation rate, which fell to 62.3% from 62.6% in just two months, a worrying sign that fewer people are actively participating in the labor market. 

(Gold – 15 Minute Timeframe) 

In the first 15 minutes after the data came, gold fell to 3311 from 3350. In the following 18 hours, gold recaptures 85% of the loss. Gold is still over the broken trendline in 1-H timeframe. With tariff deadline in 9^th July and incoming 10-12 tariff letters coming in from Trump in the next few days, gold could have potential to go upwards with market understands this jobs data is not strong as it seems.