The U.S. economy added 175,000 jobs in April – lower than expectations – while the unemployment rate increased to 3.9%, according to the U.S. Bureau of Labor Statistics.
Job gains occurred in health care, in social assistance, and in transportation and warehousing – but it appears the labor market is losing velocity.
The number of unemployed people was basically flat at 6.5 million.
The number of long-term unemployed (those jobless for 27 weeks or more) was 1.3 million, also essentially unchanged.
The long-term unemployed accounted for 19.6% of all unemployed people.
The labor force participation rate held at 62.7% while the employment-population ratio was little changed at 60.2%.
Wages continued to increase slowly: In April, average hourly earnings for all employees on private nonfarm payrolls increased by 7 cents, or 0.2%, to $34.75.
Over the past 12 months, average hourly earnings have increased by 3.9%.
In April, average hourly earnings of private-sector production and nonsupervisory employees edged up by 6 cents, or 0.2%, to $29.83.
“The April jobs report is a softer, dovish jobs report,” says Odeta Kushi, deputy chief economist for First American, in a statement. “The labor market remains in good shape, and this report is not indicative of a recessionary labor market, but it is indicative of a slowing labor market. If inflation data also comes in softer, then the Fed may have more reason to cut rates later this year.”
“The next FOMC meeting in June and will include projections,” Kushi says. “Between now and then, there will be another jobs report and more inflation data to evaluate. The Fed is more focused on inflation data, so those inflation reports will be key to the Fed’s outlook. Chairman Powell mentioned at Wednesday’s press conference that incoming inflation data ‘would be at the very heart of that decision.’ But this April jobs report is important in that it can ease Fed fears of any potential overheating in the labor market.”
“The soft jobs report may bring some immediate mortgage rate relief to the spring home-buying season – the 10-year Treasury yield dived below 4.5% in response to the jobs report, which will put some downward pressure on mortgage rates,” she adds.
Photo: Saulo Mohana