U.S. job growth slowed sharply in April while the unemployment rate unexpectedly rose, a sign that high interest rates and stubborn inflation are starting to weigh on the labor market.
Employers added 175,000 jobs in April, the Labor Department said in its monthly payroll report released Friday, missing the 243,000 gain forecast by LSEG economists. It marked the worst month for job creation since October. The unemployment rate, meanwhile, inched higher to 3.9%.
Wage growth was also more subdued last month, with average hourly earnings – a key measure of inflation – rising 0.2%, less than expected. On an annual basis, wages increased 3.9% in April.
The surprisingly weak report paints a picture of a job market that is beginning to sputter as the result of the Federal Reserve’s aggressive interest-rate hike campaign, and boosts the odds of rate cuts sooner rather than later. Wall Street welcomed the news, with all three major stock indices soaring in pre-trading Friday morning.
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“Following a steady stream of sticky inflation data in recent months, today’s much-weaker-than-expected jobs report had to bring smiles to the faces of the Fed board,” said Chris Larkin, managing director, trading and invest at E*Trade. “It may not put a June rate cut back on the table, but unless it turns out to be an anomaly, it will increase the odds that the Fed will be able to get in at least one cut this year.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 38225.66 | +322.37 | +0.85% |
| I:COMP | NASDAQ COMPOSITE INDEX | 15840.958321 | +235.48 | +1.51% |
| SP500 | S&P 500 | 5064.2 | +45.81 | +0.91% |
This is a developing story. Please check back for updates.
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