April jobs report misses expectations, signaling possible slowdown

A worse-than-expected jobs report Friday provided the latest evidence of an economic slowdown that could help ease inflation and trigger interest rate cuts. This trend, however, threatens to slow down the country’s strong economic growth.

Employers hired 175,000 workers last month, below economists’ expectations of 240,000 jobs, according to data from the U.S. Bureau of Labor Statistics. The unemployment rate reached 3.9%, which remains near its lowest level in 50 years.

Hiring in April marked a sharp slowdown from the previous month and resulted in the lowest monthly figure so far this year.

Economists who spoke to ABC News called the new data a slight slowdown that could ease fears of stubborn inflation fueled by an overly hot economy.

The slowdown, they added, could allow the Federal Reserve to cut interest rates this year without fear of triggering a rebound of rapid price increases.

“This is the jobs report that the Fed would have prepared,” Seema Shah, chief global strategist at Principal Asset Management, told ABC News.

“Of course, today’s weaker numbers must mark the start of a new, slower trend for multiple rate cuts to be seriously back on the agenda – but, until then, the new fear could be a slowdown in the economy,” Shad added.

The main stock indices rose at the start of the session Friday morning.

The labor market slowdown matches a similar trend in another major measure of economic health: gross domestic product.

U.S. production slowed significantly in early 2024, although it continued to grow at a solid pace, U.S. Commerce Department data showed last week.

This slowdown follows a prolonged period of high interest rates. Since last July, the Fed Funds rate has been between 5.25% and 5.5%, its highest level in more than two decades.

The Fed decided to keep its benchmark interest rate steady for the sixth straight time at a meeting Wednesday, citing a lack of recent progress in slowing price increases.

Inflation has fallen significantly since its peak of 9.1%, but remains more than a percentage point above the Fed’s 2% target rate.

Friday’s new jobs data could reassure the central bank that the United States has moderated its runaway growth, easing upward pressure on prices, said Mark Hamrick, senior economic analyst at Bankrate. at ABC News.

“Are you afraid the American economy will overheat?” Hamrick said: “The April jobs report throws some cold water on that idea. »

Despite this slowdown, economists have largely avoided worrying about the potential emergence of a weakened labor market.

“The April jobs report is really positive,” Mark Zandi, chief economist at Moody’s Analytics, said in an article on X. “The job market is strong but it is calming down.”