CICC: Non-farm resilience does not support the Federal Reserve's early interest rate cuts

CICC research report states that the U.S. added 147,000 non-farm jobs in June, exceeding the market expectation of 110,000. The unemployment rate fell from 4.2% to 4.1%, indicating that the labor market remains resilient. Although the uncertainty of tariffs has reduced labor demand, the tightening of immigration policies has also slowed labor supply, which has suppressed the rise in unemployment rates. In addition, there may be a skills mismatch in the labor market: on one hand, government layoffs and the rapid development of artificial intelligence have led to an "oversupply of white-collar workers"; on the other hand, the tightening of immigration policies has resulted in a continuous shortage of low-skilled positions. Under this structural mismatch, the unemployment rate may not necessarily rise significantly in the future. We believe that the June non-farm data does not support an early interest rate cut by the Federal Reserve, and we maintain our previous judgment that the next rate cut may have to wait until the fourth quarter, after the price increases caused by tariffs have passed