The latest US jobs report knocked down economists’ expectations for a Federal Reserve interest-rate increase next month.
Nonfarm payrolls rose by a seasonally adjusted 160,000 in April, the weakest gain since September, the Labor Department said Friday. The unemployment rate stayed unchanged at 5 percent but the number of people participating in the labor force fell after earlier signs of stabilization.
Employment gains have now averaged 192,000 a month so far this year, down from 2015’s average of 229,000 jobs added monthly. After declining steadily from a post-recession peak of 10% in late 2009, the jobless rate has plateaued since last fall at a historically low level.
The performance leaves Fed officials with a challenge as they try deal with an economic slowdown and mounting global political risks. The slowdown in job creation, after years of more robust gains, could reflect a return to levels generally considered healthy for an economy growing slowly and approaching full employment. Or it could signal trouble ahead due to uncertainty at home and abroad.
Meanwhile, an increase in wage growth and a pickup in the number of hours worked across the economy could signal solid underlying income growth for workers that would support stronger consumer spending in coming months. But the boost in pay remains too weak to spur inflation much above the Fed’s 2% target. The rise in average earnings lent some support to the US dollar, which has been quite resilient despite the overall jobs data. After a brief dip below 107 yen, the greenback rose back up to reach as high as107.62 yen early on Monday.