New Jobs Numbers Come in Lower Than Expected, Unemployment Rate Rises
Editor’s Note: Our readers responded strongly to this story when it originally ran; we’re reposting it here in case you missed it.
When the Bureau of Labor Statistics released its April jobs report this month, the news wasn’t good for President Joe Biden’s economy.
After a number of months of relatively positive news, the new data showed that the labor market may be cooling off.
That could be good news for U.S. inflation — if the trends continue — but a weaker jobs market is unlikely to boost Biden’s re-election chances in November.
“Total nonfarm payroll employment increased by 175,000 in April, and the unemployment rate changed little at 3.9 percent, the U.S. Bureau of Labor Statistics reported today,” a May 3 news release from BLS stated. “Job gains occurred in health care, in social assistance, and in transportation and warehousing.”
While the Biden administration may characterize the unemployment rate change as “little,” the fact remains that it was up from 3.8 percent in March.
More importantly, the economy added only 175,000 jobs in April, after the statistics were “adjusted” for the time of year, which was significantly below March’s 300,000 job gains.
It also came in under economists’ expectations, according to The Wall Street Journal.
Fox News noted that economists had predicted 243,000 new jobs for April, and that job creation in April was the worst since October.
Wages also rose at a slower rate in April, up 3.9 percent over last year, compared to 4.1 percent in March.
“Friday’s report is sure to stir immediate debate among economists and investors about whether the labor market is merely cooling in a welcome fashion or starting to show more serious strains under the pressure of higher interest rates,” the Journal suggested.
“Before Friday, recent data had shown remarkable stability in the labor market,” the report added.
The Journal also noted that stock futures rose after the BLS report was released, which may be due to investors finding hope in the data that inflation would be reined in by a cooling labor market.
However, labor trends can turn on a dime, the Journal noted, especially as “[d]emand for workers has already cooled.”
Fed Chair Jerome Powell said May 1 that he didn’t expect to cut interest rates in the immediate term because of higher inflation rates.
However, he also noted that “officials are prepared to respond to unexpected weakening in the labor market,” which could indicate a willingness to chop rates in the event of a worsening jobs market.
He also “suggested” that rates were unlikely to go up any time soon, according to the Journal.
“Following a steady stream of sticky inflation data in recent months, today’s much-weaker-than-expected jobs report had to bring smiles to the faces of the Fed board,” Chris Larkin, managing director, trading and invest at E*Trade, told Fox.
“It may not put a June rate cut back on the table, but unless it turns out to be an anomaly, it will increase the odds that the Fed will be able to get in at least one cut this year,” he added.
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