In this morning’s data, the economy added 177,000 jobs in April, higher than expected with the previous month revised lower. The Transportation and Warehousing industry was relatively strong, while the Retail Trade industry and Manufacturing industry were both relatively weak. The Unemployment Rate held steady at 4.2% and the Labor Force Participation Rate at 62.6% is one tenth higher than the previous month. Average Hourly Earnings increased 0.2% in April, slightly less than expected, and grew 3.8% on an annual basis. In addition, Average Weekly Hours were 34.3, which is the same as the revised figure from the previous month.
A decent report with a larger increase in headline payrolls in April offset by the revision lower to the previous month. The unemployment rate held steady and remains low compared to historical standards. Labor force participation ticks up and average weekly hours is the same as last month’s revised figure. Meanwhile, a slight tick lower in average hourly earnings in the month, but individuals are experiencing wage growth near historical averages on an annual basis.
Overall, the labor market remains intact in April even as the uncertainty surrounding tariff negotiations continues to unfold. Given this dynamic, the Federal Reserve is likely to keep monetary policy steady, even with the difficult readings on first quarter GDP earlier this week, until more information emerges on exactly how tariffs will affect the direction of unemployment and inflation. Meanwhile, company earnings reports over the past few weeks have been mostly positive. Amidst this backdrop, how tariff negotiations proceed and its effect on economic data will be key for the markets in the coming weeks.
In all, the yield on the 10-year US Treasury ticks higher and equity futures are also higher as we head into the market open.
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