Announced this morning, the economy added 175,000 jobs in April, less than expected. The Health Care and Social Assistance industry was again relatively strong, while Temporary Help and Information industries were relatively weak. The Unemployment Rate ticked one tenth higher to 3.9% and the Labor Force Participation Rate stayed the same at 62.7%. Average Hourly Earnings increased 0.2% in April, less than expected, and grew 3.9% on an annual basis. In addition, Average Weekly Hours were 34.3, which is one tenth lower than the previous month.
Overall, a cooler than expected headline jobs number, albeit still positive, coupled with a slightly higher unemployment rate. The labor market is still intact. Average hourly earnings were slightly less than expected, denoting a touch of weakening wage growth, and are just below the 50-year average on an annual basis.
Earlier this week, Fed Chair Powell spoke about when rate cuts may be warranted, stating it really does depend on the data. While this report may suggest rate decreases coming a bit sooner, the Fed is apt to keep rates at current levels for now until the labor market shows more signs of weakening or inflation returns to a downward trajectory. How well consumers hold up amidst this dynamic will be a key focus for the economy and markets in the months ahead.
Following the release of the jobs report, the yield on the U.S. 10-year treasury moves lower and equity futures are higher as we head into the market open.
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