The American economy created fewer jobs than expected in April and wage growth slowed down.
The US Bureau of Labour Statistics reported that there were 168,000 new non-farm payrolls added in the month, below Wall Street expectations of 192,000.
However, last month’s figure of 103,000 was revised up to 135,000.
The US is estimated to need to create roughly 100,000 jobs a month merely to keep up with the growth of the working age population.
Average earnings were up by 2.6 per cent year on year in April, dipping below the 2.7 per cent rate in March.
However, the overall unemployment rate ticked down from 4.1 per cent to just 3.9 per cent, the lowest since December 2000.
The statistics agency reported that jobs gains in the month were concentrated in business services, manufacturing, health care and mining.
“It was a mixed report. The headline numbers are disappointing but there’s nothing scary about inflation,” said Art Hogan of B,Riley FBR, a New York investment bank.
“There were fewer jobs created in the last month than consensus but the month before was revised higher. That makes this a benign report.”
Mediocre job creation
Erik Norland of CME Group highlighted the combination of an ultra-low unemployment rate and still subdued pay growth.
“Makes one wonder why the Fed is in such a rush to 'normalizs' policy given the lack of wage and inflationary pressures” he said.
“They always seem to think that inflation is just around the corner and it’s never there.”
The Federal Reserve has raised interest rates six times over the past three years in order to head off inflationary pressures, last doing so in March.
It is expected to put up the cost of borrowing to 2 per cent in June.
The BLS reported an additional 24,000 net new jobs in both manufacturing and health care and an extra 8,000 in mining
Sectors such as construction, retail, transport and hospitality saw little change in job numbers.
