U.S. Job growth slowed in April to 160000 and unemployment steady at 5 %

U.S. job growth slowed in April to 160000 and unemployment steady at 5 %

The U.S. labour market decelerated in April, a sign employers may be turning cautious after the economy slowed early in the year.

Nonfarm payrolls rose by a seasonally adjusted 160000 in April, the Labour Department said Friday. It was the weakest gain since September. The unemployment rate, obtained from a separate survey of U.S. households, held steady last month at 5 %. Economists surveyed by The Wall Street Journal had forecast payrolls to rise by 205000 and the jobless rate to remain at 5 %.

The pace of job creation slowed so far in 2016 after consecutive years of robust gains. Yet, wage increases firmed and work week grew longer last month, both signs of solid underlying demand for labour despite slower hiring.

April’s report “could signal we are coming to the end of our run of monthly 200,000-plus average job gains,” said Tara Sinclair, chief economist with job search site Indeed. Economists and policy makers might “need to start readjusting what we expect for employment gains.”

Revisions showed employers added 19,000 fewer jobs in February and March than previously estimated. So far this year, job gains have averaged 192,000 a month. That’s slower than the 229000 jobs added monthly, on average, in 2015​.

The pace of job creation recently peaked in 2014—the best year for employment growth since 1999. Steady gains since have been consistent with a healthy labour market, and drew a contrast with sluggish economic growth that decelerated further early this year.

The hiring slowdown​ could push out the Federal Reserve’s time frame for an increase to its benchmark interest rate. Officials had signalled a move was possible at their next meeting on June 14 and 15. ​But if next month’s report affirms hiring downshifted, some policy makers—already concerned about sluggish economic activity and weak inflation–with may prefer to wait until the year’s second half.

Still, with the jobless rate low, a modest softening in employment gains might not overly concern the Fed. Chairwoman Janet Yellen last year said adding 100,000 jobs a month is enough to absorb new entrants to the labour force.

“The labour market is healing,” she said last month. “We’re coming close to our assigned congressional goal of maximum employment.” At a sustainable level of low unemployment, the economy should be able to grow without large job gains.

Average hourly earnings of private-sector workers rose by 8 cents last month, or 0.3 %, to USD 25.53. From a year earlier, wages advanced 2.5 %, a firmer gain than March’s increase. The most recent annual gain is a bit stronger than roughly 2 % yearly increases recorded since the economy began steadily adding jobs in 2010.

The average workweek for private-sector workers was rose by 0.1 hour to 34.5 hours in April. The total number of hours worked increased 0.4 % from the March and up better than 2 % from a year earlier.

Professional and business services added 65000 jobs in April and health care and social assistance grew by 38200 jobs. Those categories tend to include full-time jobs.

Meanwhile the retail sector, which employs many part-time, lower-paid workers, cut 3100 jobs last month after adding an average of 50000 the prior three months. Some economists noted that an earlier Easter might have distorted retail figures.

Leisure and hospitality, another lower-paid field, added 22000 worker in April, the smallest increase in a year. Manufacturers added 4000 jobs during April, after cutting the prior two months. Employment in mining and logging, a sector that includes the coal and oil and gas industry, fell by 8000 in April, extending a long streak of declines.

While the unemployment rate held steady, the size of the labour force shrank, partially reversing increases in the prior months. The share of Americans participating in the labour force fell to 62.8 % in April from 63.0 % in March. The measure bottomed out at 62.4 % in September—the lowest level since 1977—but had crept up in recent months. The share of Americans with jobs last month was 59.7 %, also a small decrease from March.

A broad measure of unemployment that includes Americans stuck in part-time jobs or too discouraged to look for work fell to 9.7 % from 9.8 % in March. The rate is the lowest since 2008.

www.wsj.com


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