April US jobs report shows looser labor market, good news for Fed By Reuters

(Reuters) – U.S. job growth slowed more than expected in April and annual wage gains slowed, signs of a more resilient labor market that are good news for markets and the Federal Reserve, which will likely require more of these signals before shifting from higher policy to higher policy. Longer lasting. .

The Labor Department said in Friday's employment report that nonfarm payrolls increased by 175,000 jobs last month. March was revised to show jobs rising by 315,000 instead of 303,000. Economists polled by Reuters had expected the number of jobs to rise by 243,000. The unemployment rate rose to 3.9% from 3.8%. Wages rose 3.9% in the 12 months to April after rising 4.1% in March.

Market reaction:

Stocks: Added to gains and rose 1.1%, signaling a strong open on Wall Street. Bonds: The 10-year US Treasury bond yield fell and was last at 4.50%; Two-year yields fell to 4.772%, Forex: fell by 0.61%, while the euro rose by 0.62%.

comments:

Timothy Chubb, Chief Investment Officer, Girard, West Chester, Pennsylvania

“The market response is a sigh of relief. It was important to see wage growth moderate and not accelerate, especially in the context of the inflation story.”

“It is too early to estimate further rate cuts. One number does not constitute a trend. Overall, the Fed is getting the evidence it needs.”

“A lot of job growth has been driven by immigration recently which is good for wage growth as a lot of these jobs are at the lower end of wage growth. This is a continuation of progress, both in the form of inflation and slower growth.”

“We're starting to get more clarity on what that landing is going to look like. We've been calling for a tough decision. It's certainly been delayed, not dismissed.”

“Ultimately, we are starting to see more sustained progress in the economy and inflation slowing, in a way that is not as violent or dramatic. Progress has been very quiet so far.”

Brian Jacobsen, Chief Economist, Annex Wealth Management, Minno-Monie Falls, Wisconsin “The labor market has just taken a big step toward better balance. There's nothing wrong with salaries going up by 175,000. The danger is that the transition from hot to temperate doesn't stop there.” Limit but turn cold Risks will be greater if the Fed remains intent on raising interest rates, but its patient pause keeps the risks of an overshoot to the downside low.

Jason Pride, head of investment strategy and research, Glenmede, Philadelphia

“Data is weak across the board from the Fed’s perspective, which is what really matters here and an unemployment rate of 3.9% is not catastrophic. This suggests that the economy is not declining significantly, but it certainly indicates a more resilient labor market.”

“The Fed is looking for data points that pull it away from this hawkish thought process for longer. The only caveat is that labor market reports are extremely volatile and what we see this month may not be what we see next month. It gives the Fed some Hope, but it does not set the direction for them.

Peter Cardillo, Chief Market Economist, Spartan Capital Securities, New York

“This report is not too hot and not too cold, which is what the Fed wants to see. We are not seeing wages rise, we are still producing jobs, and the economy is in good shape.”

“However, the key to the report is wages that came in slightly lower than what the market was looking for.”

“It's a good report for the Fed and a good report for the markets.”

“We need more evidence, but if we continue down this path, I think that could change the timing of rate cuts, and it could mean that instead of one cut, we might be looking at two rate cuts this year.”

Quincy Crosby, Chief Global Strategist, LPL FINANCIAL, Charlotte, North Carolina:

“The jobs report came in below expectations. However, you can see from the market reaction that it is a welcome number for the market. The market at this point is hoping that the Fed will be able to cut interest rates this year and they didn't want to. From the hot numbers coming “Today's report certainly gives them a cooler read on the job landscape. Plus, more importantly, the unemployment rate is up a little bit…what this suggests is a bit of a slowdown in the labor market.” The reason it's important to the stock market is “The stock market is looking for any signs that inflation might start to decline as the labor market slows, even at the margin.”