US Markets
Friday, May 3rd, 2024 4:04 pm EDT
Key Points
- Nonfarm payrolls increased by 175,000 in April, falling short of the expected 240,000, while the unemployment rate rose to 3.9% against expectations of remaining steady at 3.8%.
- Average hourly earnings rose by 0.2% from the previous month and 3.9% from a year ago, below consensus estimates, indicating a potentially positive sign for inflation.
- Market sentiment shifted following the report, with traders now pricing in the possibility of two interest rate cuts by the end of 2024, reflecting an easing labor market and softer wage increases, despite concerns about inflation remaining above the central bank’s target.
The latest employment report from the Labor Department’s Bureau of Labor Statistics revealed that the U.S. economy added fewer jobs than anticipated in April, with nonfarm payrolls increasing by 175,000, falling short of the 240,000 estimate. This led to a rise in the unemployment rate to 3.9%, contrary to expectations of it remaining steady at 3.8%. Average hourly earnings rose by 0.2% from the previous month and 3.9% from a year ago, both below consensus estimates, which could alleviate concerns about inflation. Despite the increase in the unemployment rate, the report indicated a positive trend in job creation, particularly in sectors such as health care, social assistance, transportation, and warehousing. However, government job gains were lower than in previous months. The revisions to previous months’ data showed a slight increase in March’s gain but a decline in February. The report prompted a shift in market sentiment, with traders now pricing in the possibility of two interest rate cuts by the end of 2024, with the first expected in September, reflecting the market’s reaction to the easing labor market and softer wage increases. This contrasts with the Federal Reserve’s recent decision to hold borrowing costs steady, emphasizing the need to balance a strong job market with concerns about inflation, which remains above the central bank’s target. Despite widespread expectations for rate cuts, Fed Chair Jerome Powell did not mention the likelihood of rate reductions at the recent meeting, signaling a cautious approach to monetary policy adjustments.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/05/03/jobs-report-april-2024-us-job-growth-totaled-175000-in-april.html
