US employers pulled back on hiring in April, adding 160,000 jobs, the fewest in seven months, after a streak of robust monthly gains, a government report said today.
The unemployment rate remained at a low 5 per cent, roughly where it has been since fall.
Last month’s hiring gain marked a drop from the average increase of 200,000 over the past three months. Weak US economic growth may be making some employers more cautious about hiring.
Still, the government’s report pointed to a US job market that continues to generate steady hiring and to outperform those of most other major countries.
Worker pay also showed signs of picking up. Average hourly pay rose 2.5 per cent in April from a year earlier, above the sluggish 2 per cent annual pace that has been typical for the past six years.
Patrick O’Keefe, director of economic research at the accounting and advisory firm CohnReznick, suggested that April’s slower job growth reflects the broader slump in economic growth. The US economy expanded at just a 1 per cent annual rate over the past six months.
“It’s not going to set off cheers or jeers,” O’Keefe said of the jobs report.
The proportion of adults who either have a job or are looking for one declined in April after four months of increases. The increase in job seekers had been a positive sign because it suggested that many Americans became optimistic enough to resume looking for work amid signs of stronger hiring.
The slowdown in economic growth in the US and overseas has led to volatility in financial markets and complicated the Federal Reserve’s plans to gradually raise interest rates.
Fed policymakers have signaled that they could raise rates twice this year. But a hiring slump, if sustained, could disrupt those plans.
“By adding to signs that economic weakness is lingering into the second quarter, these disappointing numbers greatly reduce the likelihood of the Fed hiking rates this side of the presidential election,” Chris Williamson, chief economist at Markit, wrote in a research note.
In its report, the government also slightly revised down its estimate of job growth for February and March by a combined 19,000, although each month’s gain remained at a healthy level above 200,000.
April’s slower job growth might not signal a sustained pullback. Hiring slumped as recently as January only to snap back in the following months.