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Jobs

US payrolls gain in April the smallest in seven months

Construction employment barely rose and the retail sector shed jobs

PUBLISHED : Friday, 06 May, 2016, 8:52pm
UPDATED : Friday, 06 May, 2016, 8:52pm

The US economy added the fewest jobs in seven months in April and Americans dropped out of the labour force in droves, signs of weakness that cast doubts on whether the Federal Reserve will raise interest rates before the end of the year.

Nonfarm payrolls increased by 160,000 jobs last month as construction employment barely rose and the retail sector shed jobs, the Labour Department said on Friday.

That was the smallest gain since September and below the average first-quarter job growth of 200,000.

Employers added 19,000 fewer jobs in February and March than previously reported. While the unemployment rate held at 5.0 per cent that was because people dropped out of the labour force.

Economists polled by Reuters had forecast payrolls rising 202,000 last month, with the jobless rate unchanged at 5 per cent.

The slowdown in job growth could raise concerns that the weakness in overall economic activity has spilled over to the labour market.

Average hourly earnings were a bright spot in the employment report, rising 8 US cents or 0.3 per cent last month. That took the year-on-year increase to 2.5 per cent from 2.3 per cent in March, still below the 3.0 per cent advance that economists say is needed for inflation to rise to the Fed’s 2.0 per cent target.

US jobs data strong as unemployment stays low

The US central bank last month offered a fairly upbeat assessment of the labour market, saying that conditions had “improved further”.

The Fed raised its benchmark overnight interest rate in December for the first time in nearly a decad and Fed officials have forecast two more rate increases for this year.

Rate rise likely after US jobs surge

The labour force participation rate, or the share of working-age Americans who are employed or at least looking for a job, fell 0.2 of a percentage point to 62.8 per cent. It had increased 0.6 of a percentage point since dipping to 62.4 per cent in September.

The labour force shrank by 362,000 as people dropped out in April.

The vast private services sector dominated employment gains in April. Manufacturing added 4,000 jobs last month after shedding 29,000 in March, the biggest loss for the sector since December 2009.

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