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US Added Fewer-Than-Expected 175,000 Jobs In April

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Topline

The labor market showed some signs of cooling in April, as the U.S. added a lower-than-expected 175,000 jobs, data released Friday by the Labor Department show, forcing the unemployment rate to unexpectedly climb after March’s moderation.

Key Facts

The unemployment rate stood at 3.9%, surpassing market expectations for the economic indicator to remain unchanged from March at 3.8%.

The new employment figures fell short of consensus economist estimates of 240,000 new jobs, according to Dow Jones.

Job gains were recorded in industries such as health care, which added 56,000 new jobs, and social assistance with 31,000 new jobs.

Average hourly earnings grew 3.9% on an annual basis in April, stronger than the previous month’s 4.1%.

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Key Background

The April job report comes two days after the Federal Reserve held interest rates steady for the sixth time at 5.25% to 5.5%, the highest level since 2001, as the central bank aimed to maintain a balance between keeping a strong labor market while beating down inflation closer to a 2% target. Inflation rose much faster than expected in March, with the core personal consumption expenditures index jumping 2.7% from a year earlier. Investors typically expect the Fed to lower rates when inflation cools down. However, with commodity prices still stubbornly high, it appears the Fed favored price moderation over job maximization, further deeming the chances for a cut and putting employers seeking credit for business expansion that could potentially create new jobs at a place where they continue to grapple with elevated borrowing costs.

Tangent

Job openings in the United States came in weaker in March compared to the previous month, according to a survey report released Wednesday by the Labor Department. The measure of demands for labor fell by 325,000 in March to 8.5 million, the lowest since February 2021, indicating some easing of the labor market even though job openings remain at a high level.

Surprising Fact

The unemployment rate has remained below 4% for the 27th month in a row, making it the longest stretch in over 50 years.

Further Reading

ForbesGDP Growth Was Better Than It LookedForbesWhy The U.S. Has The Strongest Job Market In Recent History
ForbesWhen Will Interest Rates Go Down? Fed Holds Rates At 23-Year High Yet Again

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