By Joseph Adinolfi, MarketWatch

Expectations for the report were elevated after Wednesday's strong ADP report

The dollar traded lower Thursday after the June jobs report revealed that the pace of employment growth has been lower than it was a year ago, even as the labor market has recovered from its first-quarter slump.

The U.S. economy added 223,000 jobs in June, (http://www.marketwatch.com/story/us-adds-223000-jobs-in-june-as-unemployment-falls-to-7-year-low-2015-07-02) matching the consensus forecast from a survey of economists conducted by MarketWatch. But readings for May and April were cut by 60,000. Wage growth, another widely watched indicator, came in slightly lower than expected, with the annualized rate falling to 2%, from 2.3% last month.

The ICE U.S. Dollar Index , which measures the dollar's strength against six rival currencies with the euro most heavily weighted, was down 0.2% to 96.1150 after the data.

The euro traded at $1.1082, from $1.1041 late Wednesday in New York. The dollar weakened to 123.09 yen, from Yen123.24 late Wednesday in New York. The pound edged lower to $1.5597, from $1.5607.

Several currency strategists, including Marc Chandler at Brown Brothers Harriman and Jameel Ahmad at FXTM, said the jobs report isn't weak enough to shift expectations for when Federal Reserve policy makers will raise interest rates. Both still believe the Fed will raise rates in September for the first time since 2006.

"Those, like ourselves, who see September as the likely window, will not be dissuaded by today's data. Those expecting December or later for lift off are also unlikely to change their minds," said Chandler.

Steve Englander, global head of G10 FX strategy at Citigroup speculates that the dollar traded lower after the jobs report, not because the number was terrible, but because strong labor-market indicators released in the past week had elevated expectations.

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