Job Growth Falls Way Short Of Expectations As Unemployment Ticks Up

The U.S. added 175,000 nonfarm payroll jobs in April as the unemployment rate ticked up to 3.9%, according to Bureau of Labor Statistics (BLS) data released Friday.

Economists anticipated that the country would add 243,000 jobs in April compared to the 303,000 jobs that were added in initial estimates for March, and that the unemployment rate would remain unchanged at 3.8%, according to Reuters. The job gains accompany recent slow economic growth, with gross domestic product totaling just 1.6% year-over-year in the first quarter of 2024.

Inflation has continued to wreak havoc on businesses looking to hire, measuring 3.5% year-over-year in March, up from 3.2% in February, far from the Federal Reserve’s 2% target. Low economic growth and persistently elevated inflation have led many market watchers to speculate on whether the U.S. economy is entering or is already in a period of stagflation.

Layoffs, layoffs, everywhere, but not a claim to file?
At this point, there's no good explanation left for what's going on w/ UI claims, either initial or continuing; not only is nothing matching up anymore, but the rock-solid steadiness of these levels makes even less sense: pic.twitter.com/6OVVVPskSs

— E.J. Antoni, Ph.D. (@RealEJAntoni) May 2, 2024

Factors like a low unemployment rate in jobs data have led many to resist claims that the U.S. is at risk of stagflation, including Federal Reserve Chair Jerome Powell, who told reporters on Wednesday that he doesn’t see “the stag or the flation.” The Fed announced on Wednesday that it would not change its federal funds rate from its current range of 5.25% and 5.50%, the highest rate in 23 years, which was placed at such a level to tame inflation and the economy as a whole.

U.S. business productivity growth also slowed in the first quarter to 0.3%, while growth in manufacturing productivity increased just 0.2%, casting doubt on future economic growth levels that partly rely on increases in productivity. Growth has also been fueled by increases in government spending, which has led the national debt to balloon to over $34.6 trillion as of April 30, according to the Treasury Department.

Previous jobs numbers have been subject to substantial revisions after their initial announcements, with the federal government overestimating the number of jobs in the U.S. economy by a cumulative 1,255,000 for an average of 105,000 per month in 2023.

AUTHOR

WILL KESSLER

Contributor.

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