The US economy added the fewest number of jobs in seven months in April but it's not clear what effect that will have on the Federal Reserve's rate hike plans this year.
There was disappointing US jobs news in April as the world’s largest economy created the fewest number of new workers in seven months. In addition Americans dropped out of the workforce in droves.
Payrolls increased by 160,000 thousand last month. We also discovered employers added 19,000 fewer jobs in February and March than previously reported.
The unemployment rate held at five percent because people left the workforce.
However economists pointed out there were seasonal factors and stressed this was a slowdown not a slump.
“Employment was never going to continue rising at more than 200,000 a month indefinitely. Those monthly gains are simply unsustainable,” said Paul Ashworth, chief US economist for consulting firm Capital Economics.
The worst areas were construction, where companies took on just 1,000 extra workers in April, and the retail sector which shed over 3,000 jobs.
As well as the slowdown in hiring, there was a jump in average hourly wages last month – by 0.3 percent – which is consistent with what the Federal Reserve has previously said it expected as the US economy approaches full employment.
The feeling in financial markets is the Fed is unlikely to drastically alter its interest rate hike plans based on these numbers.