After reporting stronger than expected job growth over the past several months, the Labor Department released a report on Friday showing employment in the U.S. increased by much less than expected in the month of April.
The Labor Department said non-farm payroll employment climbed by 175,000 jobs in April after surging by an upwardly revised 315,000 jobs in March.
Economists had expected employment to jump by 243,000 jobs compared to the spike of 303,000 jobs originally reported for the previous month.
The smaller than expected increase in employment partly reflected a slowdown in the pace of job growth in the leisure and hospitality sector, which added just 5,000 jobs in April.
Meanwhile, the report continued to show strong job growth in the health care and social assistance sector as well as a notable increase in employment in the transportation and warehousing sector.
The Labor Department also said the unemployment rate crept up to 3.9 percent in April from 3.8 percent in March. The unemployment rate was expected to remain unchanged.
The unexpected uptick by the unemployment rate came as the size of the labor force increased by 87,000 persons, while the household survey measure of employment rose by 25,000 persons.
“Today’s report was a far cry from the kind of labor market weakness that would prompt a Fed rate cut,” said FHN Financial Chief Economist Chris Low. “Nevertheless, more abundant labor and slower job and wage growth should help contain inflation, and that is the key to rate cuts.”
The report showed average hourly employee earnings edged up by 7 cents, or 0.2 percent, to $34.75 in April.
The annual rate of wage growth slowed to 4.0 percent in April from 4.1 percent in March, while economists had expected the pace of wage growth to dip to 4.0 percent.
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