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NFP: US Job Market Cools to 175,000 New Hires in April, Way Below Analyst Estimates
Key points:
- US hiring efforts mark a slowdown.
- 175,000 new jobs gained in April.
- Dollar falls, risk assets go higher.
Hiring pulled back last month in signs of labor-market cooldown. It’s good news for the Fed and the future path of interest rates.
- Corporate America went easy on workers last month, adding 175,000 new joiners to the labor force, April’s nonfarm payrolls
USNFP showed. The figure, released by the Labor Department, was way below estimates of 238,000 new hires and a huge undershoot compared with the 303,000 workers tapped in March. The unemployment rate ticked up to 3.9%, indicating a slight contraction in the job market in a high-interest rate environment. - Slowing job growth isn’t necessarily bad news for markets. In fact, investors celebrated by splurging across the board — Bitcoin prices jumped 3% moments after the news, crossing $60,000 per coin. Stock futures rallied more than 0.7%, and gold overtook $2,300 after floating near $2,280 per ounce. And since all risk assets are priced in dollars, and that’s what investors paid with, the dollar fell against rival forex peers.
- One of the primary goals of higher interest rates is to cool employers’ hiring binges as a way to slow the economy. This recent batch of news could bring reprieve to the Federal Reserve as investors hope to see the first signs of incoming interest rate cuts. The other big goal for the central bank is to defeat inflation — a work in progress, especially after Fed boss Jay Powell signaled Wednesday that the inflation genie might not go back to the bottle too easily.