US job data and Fed Chair Warsh remarks fuel debate over policy outlook

Private-sector hiring in the United States slowed sharply in June, fueling debate over the labor market and the Federal Reserve's next steps. ADP reported on July 1, 2026, that employers added 98,000 private-sector jobs last month, below the 118,000 consensus estimate and a downward-revised 122,000 reading for May. The Institute for Supply Management's Manufacturing PMI for June came in at 53.3, trailing expectations of 53.8 and May's 54.0, while the prices-paid index held at 73. The headline nonfarm payrolls report released on July 2 by the Bureau of Labor Statistics confirmed the weakness. Employers added 57,000 jobs in June, well below the 110,000 forecast and May's 129,000 reading, according to the official data. Speaking at the European Central Bank's annual forum in Sintra, Portugal, on July 1, Federal Reserve Chair Kevin Warsh said the central bank would move away from forward guidance and base policy decisions on incoming economic data rather than forecasts. Warsh said interest rates remain restrictive, reiterated the Fed's commitment to price stability, and stressed that the institution would preserve its independence from political pressure, including from President Trump. Markets are weighing the combination of softer labor data and the shift in Fed communication as they reassess the path of US monetary policy.