WASHINGTON (Reuters) – U.S. job growth slowed more than expected in April and annual wage gains cooled, but it is probably too early to expect that the Federal Reserve will start cutting interest rates before September as the labor market remains fairly tight.
Nonfarm payrolls increased by 175,000 jobs last month, the Labor Department’s Bureau of Statistics said in its closely watched employment report on Friday. Data for March was revised up to show payrolls rising by 315,000 jobs instead of 303,000 as previously reported.
Economists polled by Reuters had forecast payrolls advancing by 243,000. Estimates ranged from 150,000 to 280,000.
The unemployment rate rose to 3.9% from 3.8%, still staying below 4% for the 27th straight month.
Wages increased 3.9% in the 12 months through April after rising 4.1% in March. Wage growth in a 3.0%-3.5% range is seen as consistent with the Fed’s 2% inflation target.
The U.S. central bank on Wednesday left its benchmark overnight interest rate unchanged in the current 5.25%-5.50% range, where it has been since July.
Financial markets continue to expect the central bank to start its easing cycle in September. A minority of economists believe the window is closing. Since March 2022 the Fed has raised its policy rate by 525 basis points.
Following news last week that economic growth slowed considerably in the first quarter, the moderation in payrolls could fan worries the economy was rapidly losing momentum in the second quarter. But the step-down in gross domestic product last quarter was largely because of a surge in imports, reflecting strong domestic demand.
Source: Economy - investing.com
