WASHINGTON — The U.S. labor market decelerated in April, a sign employers may be turning cautious after the economy slowed early in the year.
Nonfarm payrolls rose by a seasonally adjusted 160,000 in April, the Labor Department said Friday. It was the weakest gain since September. The unemployment rate, obtained from a separate survey of U.S. households, held steady last month at 5%. Economists surveyed by The Wall Street Journal had forecast payrolls to rise by 205,000 and the jobless rate to remain at 5%.
April’s report “could signal we are coming to the end of our run of [monthly] 200,000-plus average job gains,” said Tara Sinclair, chief economist with job search site Indeed. Economists and policy makers might “need to start readjusting what we expect for employment gains.”
Revisions showed employers added 19,000 fewer jobs in February and March than previously estimated. So far this year, job gains have averaged 192,000 a month.That’s slower than the 229,000 jobs added monthly, on average, in 2015 .
The pace of job creation recently peaked in 2014 — the best year for employment growth since 1999. Steady gains since have been consistent with a healthy labor market, and drew a contrast with sluggish economic growth that decelerated further early this year.
The hiring slowdown could push out the Federal Reserve’s time frame for an increase to its benchmark interest rate. Officials had signaled a move was possible at their next meeting on June 14 and 15. But if next month’s report affirms hiring downshifted, some policy makers — already concerned about sluggish economic activity and weak inflation–with may prefer to wait until the year’s second half.
Still, with the jobless rate low, a modest softening in employment gains might not overly concern the Fed. Chairwoman Janet Yellen last year said adding 100,000 jobs a month is enough to absorb new entrants to the labor force.
“The labor market is healing,” she said last month. “We’re coming close to our assigned congressional goal of maximum employment.” At a sustainable level of low unemployment, the economy should be able to grow without large job gains.