April jobs report likely to point to slowdown in hiring last month

The U.S. Department of Labor’s high-stakes April payroll report is projected to show that hiring increased by 180,000 last month and that the unemployment rate inched higher to 3.6%, according to a median estimate by Refinitiv economists.

That would mark a drop from the 236,000 gain recorded in March and would be the weakest monthly payroll growth since December 2020, when the economy shed 268,000 jobs.

The Federal Reserve is closely watching the report for evidence that the labor market is finally softening after months of strong job gains as policymakers try to wrestle inflation under control. Although the Consumer Price Index has cooled from a peak of 9.1% in June, it remains about three times higher than the pre-pandemic average.

A lower-than-expected figure on Friday could be a welcoming sign for the U.S. central bank, which approved the 10th straight rate hike on Wednesday afternoon before opening the door to a pause in the tightening cycle. 

“After alluding to a pause, all eyes will focus on the labor market,” said Jay Woods, chief global strategist at Freedom Capital Markets. “It has been the one major sticking point in the Fed’s inflationary battle as unemployment remains at historical lows. While it tends to be a lagging inflationary signal, it is important for the Fed to see the labor market cool – now more than ever.”