Employers added 175,000 jobs last month, marking a hiring slowdown


Hiring across the U.S. slowed in April, a sign the Federal Reserve’s efforts to shackle economic growth and curb inflation is chilling the labor market.

Employers added 175,000 jobs last month, while the nation’s unemployment rate was little changed at 3.9%, the U.S. Department of Labor said Friday. Consensus forecasts by economists surveyed by FactSet projected payroll gains of roughly 232,000. 

“Investors are willing to forgo multiple rate cuts for a better economy, which surely will drive better earnings for corporate America,” said Art Hogan, chief market strategist at B. Riley Wealth.

Stock futures leapt higher in the wake of the report, with benchmark indexes up more than 1% ahead of the opening bell.

“Coming into today’s print, the three-month average was 260,000, now it’s 230,000,” said Hogan. “Today’s 175,000 while below expectations is actually a terrific number as you average things out over the last three months.”

“The silver lining to today’s weaker-than-expected nonfarm payrolls number is it likely takes some pressure off the annualized increase in wages,” said Hogan, noting that wages that started the year going up at an annualized pace of 5.1% are now up 4.3%. “Wages still going up, but not at such a pace from keeping the Fed from ever finding a reason to cut interest rates.” 

The jobless rate has remained below 4% for 27 consecutive months, the longest such stretch since the 1960s. 

In addition to payrolls, data on wages and hours also came in weaker than expected.

The latest employment figures followed blockbuster job creation in March, when employers added a surprising and upwardly revised 315,000 jobs. Surprisingly strong economic growth and stubbornly high inflation have pushed back the Federal Reserve’s timeline for nudging down borrowing costs for consumers and businesses.

The central bank said Wednesday it was holding its benchmark interest rate at a two-decade high of roughly 5.3%, with Fed Chair Jerome Powell acknowledging that inflation is receding more slowly than policy makers expected. Starting in March of 2022, the Fed raised its short-term rate 11 times in trying to restrain surging inflation as the economy rebounded from the pandemic.

Although many economists expected the campaign to tighten monetary policy to tip the U.S. into recession this year, robust job gains, healthy consumer spending and strong corporate profits have kept the economy chugging.



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