The US labor market has started to slow significantly in April where both job additions and wage growth slowed more than economists expected in the first month of the second quarter.
In April, the US economy added 175,000 new jobs and the unemployment rate rose to 3.9%, based on new data from the Bureau of Labor Statistics released on Friday. Wall Street economists had expected nonfarm payrolls to rise by 240,000 and the unemployment rate to remain at 3.8%, based on Bloomberg data.
Wages also rose less than expected, with average hourly earnings up 0.2% from last month and 3.9% from last year. Economists had expected a monthly jump of 0.3% in April and an increase of 4% from last year.
Friday's report also showed February job growth which was estimated to have decreased to an addition of 236,000 non-agricultural jobs from the 270,000 previously reported while the March report was estimated to have increased to a job growth of 315,000 from the 303,000 reported initially.
Before Friday's report, economists had also identified the revaluation as important to note because last year had seen average monthly job growth downgraded by 13,000 jobs.
The April jobs report also showed the average number of hours worked fell last month, to 34.3 from 34.4. The unemployment rate, which includes the unemployed and those marginally connected to the labor market, rose to 7.4%.
Earlier this week, data from the BLS showed wage pressures were intensifying after the Employment Cost Index (ECI) jumped in the first quarter of 2024 to reach its highest level in a year.
In a press conference on Thursday, Fed Chairman Jerome Powell played down the idea that today's wage pressures are creating inflationary impetus, saying "basically all measures of wages have declined significantly" from the peaks reached after the pandemic.
The US dollar index, which measures the US dollar against six major currencies, was down 0.53% to trade at 104,610.
