April jobs report misses expectations, signaling a possible slowdown
April jobs report misses expectations, signaling a possible slowdown
U.S. employers added 175,000 jobs in April.
ByMax Zahn
May 3, 2024, 10:41 AM
A worse-than-expected jobs report on Friday offered the latest evidence of an economic slowdown that could help ease inflation and trigger interest rate cuts. The trend, however, threatens to downshift the nation’s brisk economic growth.
Employers hired 175,000 workers last month, falling short of economist expectations of 240,000 jobs, U.S. Bureau of Labor Statistics data showed. The unemployment rate ticked up to 3.9%, which remains near a 50-year low.
The hiring in April marked a steep slowdown from the previous month and delivered the lowest monthly reading so far this year.
Economists who spoke to ABC News characterized the fresh data as a mild cooldown that may ease fears of stubborn inflation fueled by an economy running too hot.
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The slowdown, they added, could help allow the Federal Reserve to cut interest rates this year without worrying about triggering a rebound of rapid price increases.
“This is the jobs report the Fed would have scripted,” Seema Shah, chief global strategist at Principal Asset Management, told ABC News.
“Of course, today’s weaker numbers need to mark the start of a new slower trend for multiple rate cuts to seriously be back on the agenda -- but, by then, the new fear could be a slowing economy,” Shad added.
The major stock indexes ticked upward in early trading on Friday morning.
The cooldown in the job market matches a similar trend in another major measure of economic health: gross domestic product.
U.S. output slowed dramatically at the outset of 2024, though it continued to grow at a solid pace, U.S. Commerce Department data last week showed.
U.S. Federal Reserve Chair Jerome Powell holds a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy, May 1, 2024, in Washington.Kevin Lamarque/Reuters
The cooldown has followed a prolonged period of high interest rates. Since last July, the Fed Funds rate has stood between 5.25% and 5.5%, matching its highest level in more than two decades.
The Fed decided to hold its benchmark interest rate steady for the sixth consecutive time at a meeting on Wednesday, citing a lack of recent progress in slowing price increases.
Inflation has fallen significantly from a peak of 9.1% but it remains more than a percentage point higher than the Fed's target rate of 2%.
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The fresh jobs data on Friday could reassure the central bank that the U.S. has moderated its blistering growth, easing upward pressure on prices, Mark Hamrick, senior economic analyst at Bankrate, told ABC News.
"Worried that the U.S. economy is overheating?” Hamrick said. “The April employment report throws a bit of cold water on that idea.”
Despite the cooldown, economists largely avoided alarm over the potential emergence of a weak jobs market.
"The April jobs report feels really good," Mark Zandi, chief economist at Moody's Analytics, said in a post on X. "The job market is strong but is cooling off."