Job gains lower, unemployment higher.  U.S. employers scaled back hiring in April more than anticipated and the unemployment rate unexpectedly rose, suggesting some cooling may be underway after a robust start to the year.  The labor market added just 175K jobs in April, below consensus expectations of +240K, and the unemployment rate ticked up 0.1% to 3.9%.  Earlier this week, Fed policymakers kept interest rates unchanged – as expected – noting weaker demand for labor as an indication that policy is adequately restrictive.  Uncertainty about how many rate cuts, if any, will be implemented this year (and when) has grown in recent weeks.  In response to today’s report, markets pulled forward and increased rate-cut expectations for 2024 pricing in two cuts with the first in September.

·       175K jobs added in April – Below expectations.  The U.S. labor market added 175K jobs in April, down from +315K in March and below the trailing twelve month average of +242K.  Forecasts ranged from +145K to +280K with a median of +240K.  Hiring was more pronounced in health care (+56K), social assistance (+31k), and transportation/warehousing (+22K).

·       3.9% unemployment – up from 3.8%.  The U.S. unemployment rate rose 0.1% to 3.9% in April.  Forecasts ranged from 3.7% to 3.9% with a median of 3.8%.  This marks the 27th consecutive month below 4% as unemployment has ranged from 3.4% to 4.0% since the end of 2021.  The labor force participation rate was unchanged at 62.7%.  Year-over-year, wage growth increased 3.9% decelerating modestly from 4.1% in the month prior.  Month-over-month, wages increased 0.2% compared to +0.3% in March and expectations for the same.