by Lucia Mutikani
WASHINGTON (Reuters) – The U.S. economy added more jobs than expected in April and wage growth accelerated, the Labor Department’s monthly report showed on Friday, which could prompt the Federal Reserve to hold rates high interest rates for a while.
This report, closely followed by economists and investors, reports 253,000 non-farm payrolls last month, while economists and analysts polled by Reuters forecast an average of 180,000.
The March figure was revised down by 71,000 to 165,000 in total.
The unemployment rate, calculated on the basis of a separate survey, fell to 3.4% while the consensus gave it to 3.6% after 3.5%.
The rise in the average hourly wage accelerated to 0.5%, after +0.3%, which brings its increase over one year to 4.4% after 4.3%.
The Fed raised its interest rate an additional 25 basis points on Wednesday and signaled that it may pause its monetary policy tightening campaign.
Some analysts, however, believe that the labor market overestimates the health of the economy, pointing to the divergence between consumer spending and job creation, as well as the continued decline in worker productivity.
US consumer spending stagnated in February and March, while productivity fell for five consecutive quarters.
Economists also note that job growth is concentrated more in leisure and hospitality, as well as in government, sectors where employment remains below pre-pandemic levels.
Employment prospects could change quickly, however, as recession risks increase due to high borrowing costs and tighter credit conditions amid strained financial markets.
For now, the general consensus is that the economy will continue to create jobs at least until the fourth quarter.
Yields on Treasury bills amplified their rise after the publication of the Labor Department report and around 13:07 GMT, that of ten-year securities took more than nine points to 3.4502%.
At the same time, the dollar went into the green and appreciated by 0.31% against a basket of reference currencies.
(Lucia Mutikani, Laetitia Volga and Diana Mandiá, edited by Matthieu Protard and Kate Entringer)
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