US job growth slows more than expected in April – NFP

The latest data on US job growth in April shows a slowdown in the pace of hiring, with nonfarm payrolls increasing by 175,000 jobs, compared to an upwardly revised figure for March. While this figure fell short of expectations, it’s still indicative of a fairly tight labor market.

Although the unemployment rate rose slightly to 3.9% in April, it has remained below 4% for over two years, indicating a relatively low level of unemployment. Annual wage gains also cooled slightly to 3.9% in April, down from 4.1% in March, but still within a range seen as consistent with the Federal Reserve’s inflation target.

The Federal Reserve recently decided to leave its interest rate unchanged in the current range of 5.25%-5.50%, where it has been since July. Despite some expectations in financial markets for the central bank to begin easing monetary policy in September, a minority of economists believe this window may be closing.

Since March 2022, the Fed has raised its policy rate by 525 basis points, signaling a tightening of monetary policy. However, given the recent moderation in economic growth, particularly in the first quarter, concerns may arise about the economy’s momentum in the second quarter. It’s worth noting that the slowdown in GDP growth last quarter was mainly attributed to a surge in imports, which reflects strong domestic demand.

Overall, while there are indications of a moderation in economic activity, the labor market remains relatively robust, suggesting that any decisions by the Federal Reserve regarding interest rates will likely depend on further developments in economic indicators.