United States: Increase in non-farm payrolls disappoints in April

Non-farm payrolls grew by 160,000 in April, which followed March’s downwardly revised increase of 208,000 (previously reported: +215,000). April’s gain, nonetheless, disappointed analysts who had seen payrolls increasing by 200,000. The result represented the 67th month with uninterrupted job gains, which is the longest streak on record.

The private sector was mainly responsible for hiring in April, having added 171,000 jobs. Conversely, the public sector shed 11,000 jobs, which marked the first time in eight months that the public sector cut jobs overall. The soft employment gain in April was the result of a moderation in construction and a loss in retailing.

The unemployment rate, which is derived from a different survey, inched remained stable at March’s 5.0% in April. The participation inched down from 63.0% in March to 62.8% in April. Despite the subdued reading in April, the unemployment rate remains below the Fed’s target zone of 5.2%–5-5%.

In light of the employment figures and the Fed’s recent communication, it is likely that U.S. monetary authorities will postpone an interest rate hike in June.

FocusEconomics Consensus Forecast panelists expect unemployment to average 4.8% in 2016, which is unchanged from last month’s forecast. For 2017, the panel expects the unemployment rate to drop to 4.6%.