According to the Labor Department 160,000 non-farm jobs were added in the US during April, under consensus forecasts of 200,000.
The figure was generally considered as not high enough to suggest a rate rise could be come as soon as June, but by no means low enough to rule out a rise later this year.
US Secretary of Labor Thomas E. Perez put a positive spin on the report. “Today’s report is further evidence of a steady recovery that continues to put more people back to work,” he said. “It’s not just about the quantity of jobs, it’s about who’s getting the jobs. It’s especially heartening to see the long-term unemployed get back in the game. Roughly two-thirds of the decline in the unemployment rate over the last year has come from the ranks of the long-term unemployed.”
Neutral observers were less upbeat.
“A figure of 160,000 US non-farm jobs added in April undershoots both last month and consensus expectations and paints a picture of a US economy that is stagnating at best,” said investment director at AJ Bell Russ Mould.
“When taken in conjunction with this week’s ADP jobs survey and the Challenger, Gray and Christmas job cuts report, the loss of momentum in the jobs market is noticeable,” Mould continued. “Under such circumstances it is hard to see why the US Federal Reserve would rush to raise interest rates at its 14-15 June meeting. Low interest rates may, in theory, help support the stock market but with lofty valuations already pricing in a strong recovery in the economy and corporate profits this week’s soggy trio of jobs readings could warn of disappointment and further share price volatility ahead.”
“At first glance this would seem to be a soft report; however, other elements were more robust,” said Schroders’ chief economist Keith Wade. “For example, average hourly earnings growth ticked up to 2.5% year-on-year and the average work week increased by 0.4% month-on-month. The latter is a useful indicator of GDP growth and suggests that the US economy got off to a good start in the first month of the current quarter, thus reinforcing hopes of a bounce back from a subdued first quarter.”
