The U.S. job market is facing an unexpected shift compared to the start of 2024. A recent report from the Bureau of Labor Statistics shows that U.S. employers added fewer jobs in April while the unemployment rate saw a rise.
According to the report, the total nonfarm payroll employment increased by 175,000 last month compared to 240,000 estimated by Dow Jones. This represents a steep decline compared to March, when 315,000 jobs were added, dwarfing the expected gain of 205,000.
The expectations were that the unemployment rate would remain steady at 3.8%, but April brought an uptick to 3.9%. Additionally, the wage gains also didn’t fare as estimated, rising 0.2% from March and 3.9% compared to the same period in 2023.
The cooldown of the job market is something that the Federal Reserve will likely look at as a sign that their interest rate policies are producing the desired results. With a slower labor market, the Fed will come closer to its goal of taming inflation and bringing it to 2%.
“Demand is still strong — the demand side of the labor market, in particular,” Federal Reserve Chair Jerome Powell said earlier this week. “But it’s cooled from its extremely high level of a couple of years ago.”