Wall Street surges after economy adds just 175,000 jobs in April

For the first time in a while, the latest US employment figures came in below economists’ expectations. Job growth in April was sharply weaker than in the prior month and the unemployment rate edged higher, instead of holding steady as economists projected. The job market clearly slowed down this spring, but it remains robust.

Fed officials have said they want to see the job market come “into better balance” to help bring inflation lower. They got that with the April jobs report. But they’re not necessarily popping champagne bottles, either.

For starters, this is just one month’s data, so it remains to be seen whether this softening momentum will continue. Fed Chair Jerome Powell also said in his latest news conference — after the central bank held interest rates steady for the sixth-straight meeting — that policymakers would be concerned to see an “unexpected weakening in the labor market.”

That means officials prefer to see a steady and orderly slowdown.

A string of unexpectedly weak labor data in the coming months could force officials to consider cutting rates sooner than expected, since the Fed is also mandated by Congress to maximize employment, in addition to stabilizing prices.

It’s too soon to tell whether April was just noise or the start of a trend, but at least the Fed doesn’t have worry about the job market heating back up.