The U.S. economy added just 175,000 jobs in April, roughly 65,000 fewer than economists had expected. The unemployment rate ticked up from 3.8 percent to 3.9 percent, according to Labor Department data released this morning.
💡 Why this is important: Job growth had been hotter-than-expected in the past few months. That kept the Federal Reserve from lowering interest rates. If the rates are dropped too soon, it could accelerate inflation. The Fed has been looking for any sign for when it can begin dropping rates. This month’s lower-than-expected jobs’ report certainly is a sign.
What to expect: “While [the Fed not cutting rates this month] was widely expected, an uptick in inflation and other strong economic indicators have shifted the central bank’s rate cut timeline further into the future. Most traders don’t expect the Fed to start cutting rates until September, according to the CME FedWatch Tool, which lurched briefly to November on Wednesday.” (The Hill)
