In April, although the nation’s employers reduced their hiring pace, they still managed to add a respectable 175,000 jobs. This suggests that the continuously high interest rates might be beginning to dampen the strong US job market.
The recent government report indicated a substantial decline in hiring compared to March’s impressive surge of 315,000 jobs. Moreover, April’s job growth fell well below the anticipated increase of 233,000 positions predicted by economists.
However, the deceleration in hiring momentum, along with a slowdown in wage growth last month, is likely to be positively received by the Federal Reserve. The Fed has maintained high interest rates to combat persistently elevated inflation levels. Hourly wages experienced only a modest 0.2% uptick from March and a 3.9% increase from a year earlier, marking the smallest annual rise since June 2021.
The Fed has postponed any discussions of reducing interest rates until it gains greater confidence that inflation is steadily decreasing towards its target. Lowering Fed rates would gradually decrease borrowing costs for mortgages, auto loans, and other consumer and business loans.