American employers signalled their caution about a sluggish economy by slowing their pace of hiring in April after months of robust job growth. But the unemployment rate remained a low 5 per cent, roughly where it’s been since last fall.
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According to another report by Challenger, Gray & Christmas released this week, US companies laid off 61,582 people in April, a seven-year high. Therefore, the labor market will continue to tighten, likely more quickly than the Fed anticipates and that will put upward pressure on wages.
Worker pay also showed signs of picking up.
The average workweek for private-sector workers was rose by 0.1 hour to 34.5 hours in April.
However economists pointed out there were seasonal factors and stressed this was a slowdown not a slump. The momentum is still strong, as the economy has been adding jobs for 74 straight months. He said the jobs report did not alter that view.
Economists had forecast payrolls rising 202,000 last month.
But the services sector fared better, with a 26,800 increase in retail and wholesale trade jobs, and a 21,900 gain in he accommodation and food services sector. Most observers believe that the Federal Reserve will not raise interest rates in June-given that wage growth is below any reasonable target, this is a prudent move.
The markets read the data as putting off a bit the next Fed rate increase, after it raised its benchmark short-term rate to 0.25-0.50 percent in December. Adding to the report’s weak nature was that employers added 19,000 less jobs in February and March than had been previously reported. Job growth slowed compared with previous months.
All told, monthly job growth of 100,000 per month will eventually become the new 200,000.
Unseasonably cool weather in the Northeast may have delayed shopping for summer clothes, causing stores to cut workers.
The unemployment rate held steady last month at 5 percent, the Labor Department reported.
The low number of construction job gains in April may be a bad sign for the housing industry. Gains in education and health care remained steady, climbing 54,000 last month, above its three-month average of 49,000.
Collectively the transportation and warehousing sector gained 8,600 jobs in April, with warehousing and storage adding 6,500 of those, offsetting the loss of 3,700 railroad jobs.
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Florida was one of the six states to see the largest increase in the unemployment rate during the recession, but now has an unemployment rate on par with the national average. According to the national number cruncher, there were more than 5,000 people able to work in Victoria in April than there had been at the same time a year ago.
