US adds 175,000 jobs and unemployment rate rises to 3.9 percent, falling short of economist expectations

The U.S. economy added 175,000 jobs in April, and the unemployment rate rose to 3.9%, according to new Labor Department data released Friday.

April’s employment report was lower than economists expected, with 240,000 new jobs and an unemployment rate of 3.8%.

The latest jobs report came days after the Federal Reserve decided not to cut interest rates, which have hovered in the 5.25% to 5.5% range since July of last year, the highest level in 23 years.

The move had been widely expected, but rising inflation and other positive economic indicators pushed the central bank’s rate cut schedule further into the future. Most traders don’t expect the Fed to start cutting rates until September, the paper said. CME FedWatch ToolsWednesday briefly tipped into November.

In explaining its decision to keep interest rates on hold, the Federal Open Market Committee (FOMC), which sets monetary policy, said it saw “no further progress” in bringing inflation back to 2%.

Prices rose 3.5% in March from a year earlier, according to the latest Consumer Price Index (CPI), moving further from the Fed’s target than late last year, when the central bank signaled a rate cut in 2024.

“It will likely take longer than we previously expected to gain this much confidence,” Fed Chairman Jerome Powell said.

The big job gains are a positive for Mr. Biden, who has been plagued by negative assessments of the economy and inflation. However, a slight economic slowdown in April could ultimately give the Fed more room to cut interest rates and curb the source of economic anxiety among Americans.

High interest rates are increasing the cost of borrowing for Americans, especially those with credit card debt, mortgages, or car payments. Household debt also exceeded $17 trillion in the fourth quarter of 2023, and delinquency rates were on the rise, according to the New York Fed’s Quarterly Report on Household Debt and Credit.

A recent poll found that only 34% of voters approve of Biden’s handling of the economy, and 29% approve of his handling of inflation. CNN poll. He is also trailing former President Trump, a Republican candidate who voters believe will do a better job on economic policy than Biden.

As the 2024 election season gets into full swing, scrutiny of the Fed and its interest rate policy is also increasing.

Progressive Democrats are pressuring the Fed to start lowering interest rates, saying they are burdening average Americans and exacerbating income inequality and the housing crisis.

But President Trump has indicated that Powell will cut rates to benefit Democrats in the next election. President Trump nominated Powell during his first term, but publicly accused Powell of raising interest rates to worsen the economy in 2018, and even though he won the White House in November, Powell He has stated that he will not be reappointed.

But Powell stressed to reporters Wednesday that the Fed is politically independent and does not factor politics into its decision-making process.

“Read all the records and see if anyone mentions the disputed election in any way. That’s not part of our thinking. That’s not what we’re hired to do. . . . If we start down that path, I don’t know how to stop it again,” Powell said.