The US labor market experienced a notable slowdown in April, with hiring and wage growth falling short of economists’ expectations. According to new data from the Bureau of Labor Statistics, the US economy added 175,000 new jobs last month, while the unemployment rate rose to 3.9%. This was below the 240,000 nonfarm payrolls increase and 3.8% unemployment rate that Wall Street economists had forecasted.
Wages also grew less than expected, with average hourly earnings rising 0.2% over the previous month and 3.9% over the last year. Economists had anticipated a 0.3% monthly increase and a 4% yearly rise. The report also revealed revisions to previous months’ job growth, with February’s numbers revised down and March’s revised up.
The healthcare and social assistance sectors saw the most significant job gains in April, while retail and transportation industries also experienced growth. The average workweek decreased slightly, and the underemployment rate rose to 7.4%.
The slowdown in wage growth could potentially lead to the Federal Reserve lowering interest rates later this year, despite inflation data remaining above the central bank’s 2% target. Fed Chair Jerome Powell recently stated that wage pressures are not currently driving inflation, as most wage measures have decreased from their pandemic peaks.
Economists are closely monitoring indicators like the JOLTS quits rate for further insights into wage growth trends. This breaking news story is developing, with more updates expected to come. Stay tuned for the latest economic news and indicators to guide your investment decisions.