The United States economy added fewer jobs in April than initially expected.
The number of payrolls in the US nonfarm increased by 175,000 last month. The relevant data on Friday, May 3, was released by the Bureau of Labor Statistics of the United States Department of Labor. It is worth noting that the Dow Jones consensus forecast provided that the mentioned indicator would reach the 240,000 mark.
The unemployment rate in the United States was 3.9% last month. It is worth noting that it was widely believed in the expert community that this indicator would not change and would remain at 3.8%.
The average hourly earnings in the United States last month showed an increase of 0.2% compared to data for March. This indicator also rose by 3.9% compared to the figure for April 2023.
It is worth noting that last month the unemployment rate in the United States was the highest since January 2022. The broader indicator, which includes discouraged workers and those who work part-time for economic reasons, rose to 7.4% in April, reaching the highest level since November 2021.
The level of labor force participation or those who are actively looking for work has remained the same. This figure is 62.7%.
Dan North, senior economist at Allianz Trade, says that the report on the state of affairs in the US sphere of employment is predictable in terms of its compliance with current realities. In this context, the expert noted that interest rates in the United States continue to be very high, which is why the slowdown in the labor market is a natural process due to an objective causal relationship.
In April, 56,000 jobs were added in the healthcare sector. In the spheres of social assistance, transportation, and warehousing, the corresponding figure increased by 31,000, 22,000, and 20,000 respectively last month. In the construction area, 9,000 jobs were added in April. In the government sector, the number of jobs increased by 8,000 last month.
In March, the United States economy added 315,000 jobs. This figure exceeded initial expectations by 12,000. In February, the US economy added 236,000 jobs. This indicator turned out to be 34,000 less than the figures that the preliminary forecast provided.
Employment in US households increased by only 25,000 people in April.
The report on the state of affairs in the sphere of employment of the United States was published two days after Federal Reserve officials voted to keep the cost of borrowing at the same level. Currently, the benchmark overnight borrowing rate is in the target range of 5.25% to 5.5%. This figure is the highest in more than 20 years.
Fed Chairman Jerome Powell described the current state of affairs in the labor market as strong. At the same time, he noted that the inflation rate is too high. Moreover, Jerome Powell said that recent economic data indicate that there is no further progress in returning the growth rate of the cost of goods and services to the Fed’s 2% target.
As we have reported earlier, Jerome Powell Keeps Hopes Alive for Interest-Rate Cut.
