The U.S. economy added 160,000 jobs in April, according to the Bureau of Labor Statistics in its monthly report. The median forecast in a Bloomberg survey called for a 200,000 April advance.
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In an encouraging sign, wage growth continued to be solid.
“Today’s payroll number is definitely a soft number, but it’s not devastating”.
According to analysts, with the unemployment rate staying at 5 percent, below its pre-recession average of 5.3 percent, fewer job gains would not be a top concern for Federal Reserve officials. Prior to April, the US had added 200,000 or more jobs in five of the previous six months. In this context, the further sharp decline in manufacturing jobs will be a significant disappointment, especially as there had been a very competitive Canadian dollar in the first quarter of 2016. Although some investors viewed the report as a red flag for the USA central bank, the influential head of the New York Fed said the he wasn’t too concerned by the data and that two interest rate hikes this year were still a “reasonable expectation”.
“We now only expect one rate hike in 2016, in September, as we believe it will take longer for policymakers to accumulate sufficient evidence that economic and labor market activity is rebounding after a soft start to the year”, said Michael Gapen, chief economist at Barclays in NY.
Commenting on the core job creation number Russell Price, senior economist at Ameriprise Financial Services in MI, said it was disappointing. March was initially reported as a 215,000 increase.
Another report released on Thursday by the US Department of Labor found that jobless claims climbed to 274,000 in the last week of April – up 17,000 from the week before.
The bright spot in the report was in workers’ wages. Hourly pay rose 2.5% in the past 12 months, up from 2.3%.
But most experts say the steady gains in the labor market in recent months are a sign that the economy should continue to expand at a decent, if hardly spectacular, pace for the rest of 2016.
The acceleration in April may have reflected a calendar quirk.
Payroll gains topped 200,000 in five of the six previous months and have averaged 232,000 a month over the past year. The 0.4 percent increase in aggregate hours and higher earnings left workers with a 0.7 percent increase in their take-home wages, which should support consumer spending.
The workweek average for workers in the private sector was up by 0.1 hours to just over 34.5 hours during March. Economists had projected retail hiring would ease up in April after a first-quarter surge of 157,500. They see a less than 40 per cent probability of rate hikes in September and November, with a 48 per cent chance at the December meeting.
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Employment in leisure and hospitality also softened, rising by 22,000, the smallest gain in a year.
