📖 Your Q2 Earnings Guide: Discover the Stocks ProPicks AI Highlights to Jump Post-EarningsRead more

U.S. adds fewer jobs than anticipated in April

Published 05/03/2024, 08:35 AM
Updated 05/03/2024, 09:15 AM
© Reuters

Investing.com -- The U.S. economy added fewer jobs than anticipated in April, potentially impacting when markets expect the Federal Reserve to roll out possible interest rate reductions this year.

The Labor Department's closely-monitored labor market report showed that nonfarm payrolls came in at 175,000 last month, down from an upwardly revised total of 315,000 in March. Economists had predicted a reading of 238,000.

Meanwhile, the unemployment rate was 3.9%, accelerating slightly from 3.8% in the prior month. The figure was projected to equal March's pace. However, it marked the 27th consecutive month that the jobless rate has been below 4%.

Growth in average hourly wages also registered 0.2% month-on-month, slowing from 0.3% in March. The number was estimated to be in line with the previous month.

Cooling labor demand has been a key goal of a rate tightening cycle by the Fed, with policymakers hoping that the softening may alleviate upward pressure on inflation. As such, recent resilience in the job market has partly persuaded Fed officials to shy away from interest rate reductions that were initially expected earlier this year.

On Wednesday, Fed Chair Jerome Powell noted that while sticky inflation has dented chances of an imminent cut, it was "unlikely" that the central bank will once again hike borrowing costs.

Traders reacted to the report by bolstering bets that the Fed could slash rates by as much as 50 basis points -- or two 25-basis point reductions -- this year.

"[F]urther clarity will be needed to understand the depth of the slowdown [in the labor market]," Thomas Monteiro, Senior Analyst at Investing.com, said. "However, should the Fed find itself amid a stagflationary economy, it will have no doubt about its priorities, and that should be employment."

U.S. stock futures were pointing higher in the wake of Friday's data, while U.S. Treasury yields fell. Yields typically move inversely to prices.




Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.