OAN’s James Meyers
8:25 AM – Friday, May 3, 2024
The latest jobs report showed U.S. employers increased their payrolls by 175,000 in April, a notable slowdown from the average 276,000 new jobs per month created so far this year.
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April’s job growth figure fell short of the 240,000 roles that analysts were predicting, which suggests the possibility that the economy could be slowing down towards an interest rate cut.
The unemployment rate went higher to 3.9% against expectations it would hold steady at 3.8%.
April’s job report was strengthened in hiring across healthcare, social assistance and transportation industries.
Additionally, the jobless rate tied for the highest level since January 2022. The 7.4% rate includes discouraged workers and those holding part-time jobs for financial reasons, which is the highest level since November 2021.
Furthermore, the labor force participation rate, or people looking for work, stayed the same at 62.7%.
The latest economic data gives an unpredictable path forward for Federal Reserve Chair Jerome Powell, who stated on April 16th that “given the strength of the labor market and progress on inflation so far, it’s appropriate to allow restrictive policy further time to work and let the data and the evolving outlook guide us.”
However, Powell made little of possible further rate hikes as recent economic data has yet to build central bankers’ confidence they seek in falling inflation.
The World Bank on Monday also warned that energy and other products that could potentially be coming to an end, citing tensions across the globe for pressure on demands for oil, industrial metals and other supplies.
Then on Tuesday, the Labor Department said the employment cost index (ECI), which is used to measure worker compensation and benefits, garnered just a small 1.2% in the first three months of this year.
With the latest warning signs, it throws more doubt on whether the Fed’s ability to bring inflation down to its 2% goal by the end of 2024 will be reached.
Meanwhile, to bring down inflation from its high of 9.1% in the summer of 2022, central bankers issued 11 different rate hikes in an effort to help the struggling economy, which lifted borrowing rates to their current 23-year high, between 5.25% and 5.5%.
April’s CPI is set to be released on May 15th.
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