WASHINGTON — The United States added 160,000 jobs in April, new government data showed Friday morning, the weakest pace of hiring in seven months.
Though the unemployment rate held steady at 5.0 percent, Friday’s jobs data provided an unexpectedly downcast signal about the nation’s labor market: A surge of Americans dropped out of the workforce and hiring in several key industries, including construction and manufacturing, all but stalled.
The Department of Labor also revised downward jobs gains in the prior two months by a combined 19,000.
The deceleration in jobs growth provides the first potential signal that broader economic sluggishness – the result of thinned corporate profits and cautious business and consumer spending – could be spilling into the labor market.
For the prior six months, the U.S. had maintained robust employment growth, even though the rest of its economy was stuck in second gear. Last week, data showed that the U.S.’s gross domestic product grew only 0.5 percent on an annualized basis in the first quarter, and economists said the contradictory mix of rapid hiring and weak growth was unsustainable. In a speech earlier this week, Dennis Lockhart, the president and CEO of the Atlanta Fed, said that the “economy is throwing off mixed signals.”
Friday’s jobs report is hardly dire – economists say the U.S. needs to add roughly 100,000 jobs in a month to keep up with population growth – but marked a sharp snap back from the pace of the last half-year. Prior to April, the U.S. had added 200,000 or more jobs in five of the previous six months.
Economists surveyed by Bloomberg had expected that the U.S. in April had added 200,000 new jobs, enough to push the unemployment rate down to 4.9 percent.
Perhaps the most disappointing data point came in labor force participation rate, which tumbled down as more than 300,000 Americans left the labor force – meaning they either left jobs or abandoned their searches. A thinning of the labor force is a bad sign for the economy, because it means that competition is diminishing for jobs – and there is less pressure on employers to push up wages.
The shrinkage in the labor force helped to cut into earlier, substantial gains. Between October and March, the nation’s labor force grew by more than 2 million. Labor force participation data can be volatile from month to month, and the dip in April could be driven in part by Baby Boomer retirements.
Americans in April did see their salaries bump up by a solid eight cents in what analysts called the bright spot of Friday’s data. That is the third-best monthly gain over the last year, and during that span, wages have risen 2.5 percent – a notch above the 2.0 percent pace maintained throughout much of the recovery from the Great Recession.
Especially given the nation’s low inflation, “workers are starting to see some benefits of the tightening labor market over the previous few years in terms of higher earnings,” Harry Holzer, a professor of public polict at Georgetown University and author of the book, “Where Are All the Good Jobs Going?” said in an email.
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