According to the United States Bureau of Labor Statistics, total non-farm payroll employment in the US rose by 147,000 jobs in June (May: +144,000 jobs) – above market expectations (+110,000 jobs). The increase was primarily driven by higher employment in state government (+47,000), particularly in the education segment, coupled with continued gains in healthcare (+39,000), with job growth concentrated in hospitals and nursing & residential care facilities. Employment in social assistance (+19,000) also remained resilient, largely due to increased demand in individual and family services. In contrast, federal government employment declined further by 7,000 jobs, resulting in cumulative job losses of 69,000 since January 2025. Additionally, cyclical sectors including manufacturing (-7,000) showed outright job losses, underscoring the underlying weakness in private sector employment. That said, the broad-based unemployment rate edged lower to 4.1% m/m (May: 4.2% m/m), while the labour force participation rate ticked down to 62.3% m/m (May: 62.4% m/m). Consequently, average hourly earnings increased by 0.2% m/m to USD36.30, though the average workweek shortened slightly to 34.20 hours. Looking ahead, we expect Job growth to remain modest in the near term as momentum continues to fade. With gains increasingly concentrated in public and healthcare sectors, and employment in cyclical industries showing limited progress, the underlying strength of the labour market appears to be waning. This uneven pattern points to a slower pace of job creation ahead, particularly as businesses navigate ongoing policy shifts and trade-related headwinds. Thus, we expect the FOMC to keep rates steady at the July meeting, as the committee weighs still-elevated wage pressures against slowing job creation and persistent economic uncertainty. Based on the recently released data from Eurostat, headline inflation in the Euro Area edged up by 10bps to 2.0% y/y in June (May: +1.9% y/y) – in line with market expectations (+2.0% y/y). The modest uptick was driven by a rebound in services inflation (+4.1% y/y vs May: +3.7% y/y), reflecting stronger summer-related demand pressures. Meanwhile, food, alcohol & tobacco inflation eased slightly to 3.1% y/y (May: +3.3% y/y), while energy prices remained in deflationary territory, falling by 4.0% y/y (May: -4.3% y/y). On a month-on-month basis, consumer prices rose by 0.3% (May: 0.0%). Looking ahead, we expect headline inflation to hover around the ECB’s 2.0% target through Q3-25, amid diverging trends in services and goods prices. Although June’s CPI print may temper immediate expectations of another rate cut, we believe the ECB will maintain a data-dependent posture. The Council is likely to monitor the trend in services inflation and the broader impact of June’s cut in domestic demand and financial conditions before initiating further easing. Accordingly, the ECB is expected to hold its monetary policy rates steady at the July 24 monetary policy meeting, before initiating a final cut at its September meeting.
Executive Summary
The global economy shows mixed signals with US job growth exceeding expectations, Euro Area inflation stabilizing near 2%, and cautious market sentiment amid US-China trade tensions.Nigeria’s current account remains surplus but is expected to decline due to lower oil prices and rising debt.Nigerian equities remain bullish, while bond yields decline amid improved liquidity; the naira stabilizes supported by FX inflows.