Economists polled by Reuters had forecast payrolls rising 160,000 in June.
The market's downbeat response to an upbeat report reflects investors' white-is-black logic.
The healthy rebound in jobs growth in June could ease pressure on the Federal Reserve to cut interest rates later this month to help stimulate the US economy as global trade growth and business activity appear to slow.
The only problem with this reasoning is that it amounts to saying stocks need a weaker economy to prosper. "Yet our economy is much better than it's ever been". "This makes no sense to me". In June, job growth occurred in ambulatory health care services (+19,000) and hospitals (+11,000).
Trading volume was light as USA markets reopened following the Independence Day holiday. Gold fell once again below $1400, a key psychological price point for the precious metal. Average hourly earnings rose at a 3.1%-a-year pace.
There are good reasons for the bond market's wariness.
Manufacturing and transportation are especially vulnerable to disruptions from trade battles.
The U.S. has not resolved its trade dispute with China, but the two countries agreed last weekend to resume trade talks, putting off new tariffs. So are home sales.
June results for the overall economy serve as a welcome sign of relief for the USA economy.
"That's good for consumer spending", House said, which is a major pillar of the US economy. And transportation and warehousing also showed solid gains with almost 24,000 jobs added.
The US Department of Labor will release non-farm payroll data, a measurement of job growth seen as an indicator of economic strength, for the month of June.
"It appears that, unless the report shows a radically lower figure - as happened in May - markets could accept a broadly solid jobs report as confirmation that the July FOMC meeting will result in only 25 basis point of easing", Chris Turner, global head of strategy at ING, said.
"The data are unlikely to stop the Fed from easing at this month's meeting", said Jim O'Sullivan, chief USA economist at High Frequency Economics in White Plains, New York.
Larry Kudlow, a top Trump economic adviser, said earlier Friday that the Fed should reduce interest rates.
The pace of rate cuts from there will hinge on broader questions.
Some of the recent drop in the jobless rate has been because of people leaving the labour market.
Then there is the political backdrop.
Last month's burst of hiring suggests that many employers have shrugged off concerns about weaker growth, President Donald Trump's trade wars and the waning benefits from US tax cuts. A Fed rate cut, whenever it happens, would be its first in more than a decade.
"Currently market pricing is at a 100% certainty that we will get some form of move from the FOMC when they meet at the end of this month, despite data that while by and large is a little softer, isn't screaming economic slowdown".
Rate cuts would give the stock market exactly what it wants.
An economist tapped by U.S. President Donald Trump for a governorship at the Federal Reserve said on Friday she did not think policymakers should pull the rug out from under financial markets, according to CNBC.
- Dutch beat Swedes to set up Women's World Cup final with USA
- Two results which will determine who India face in World Cup semifinal
- Halle Bailey to play Ariel in Disneys Little Mermaid
- Facebook, Instagram Go Down and People Notice AI-Generated Captions
- Brazil Get Its Final and Messi Will Never Win With Argentina
- Storms and heat for the 4th of July weekend
- USA's Megan Rapinoe says Fifa showing women's football 'lack of respect'
- Gayle saunters off World Cup stage as West Indies look to future
- Roger Federer Rates Prince George's Tennis Skills After Practicing Together
- South Africa bat against Australia in World Cup