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Slow hirings show US firms cautious over economy
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AMERICAN employers signaled their caution about a sluggish economy by slowing their pace of hiring in April after months of robust job growth.
At the same time, companies raised pay, and their employees worked more hours — a combination that lifted income and, if sustained, could quicken the US expansion.
As a whole, the government's report on Friday pointed to an American job market that continues to generate steady hiring, though at a rate that may be starting to slow. Employers added 160,000 jobs in April, well below the average gain of 243,000 in the prior six months. But the unemployment rate remained a low 5 percent, roughly where it's been since last fall.
"Employment was never going to continue rising at more than 200,000 a month indefinitely," said Paul Ashworth, an economist at Capital Economics, a consulting firm. "Those monthly gains are simply unsustainable" at a time of tepid economic growth.
Over the past six months, the economy has expanded at an annual pace of just 1 percent. Anecdotal evidence suggests that some employers have become concerned that sluggish growth could weaken customer demand and limit the need for more employees.
Still, most economists said they were not worried about the weaker hiring in April. In large part, it reflected declines in retail and construction hiring, an expected pullback after hiring in those areas surged in the first quarter of 2016.
And job gains have slipped before — most recently in January — without signaling any persistent slump.
"The figures are a yellow light, not a red flag," said Andrew Chamberlain, chief economist at Glassdoor, an employment website.
April's hiring slowdown may also reflect a long-expected shift to a more sustainable pace of job creation. The job market has added 200,000-plus jobs a month for more than three years. That's harder to achieve once unemployment falls to 5 percent, consistent with a nearly recovered economy.
"The good news is that more people were employed, they worked longer hours and got paid more for it," said Robert Dye, chief economist at Comerica Bank.
The slowdown in economies in the US and overseas has led to volatility in financial markets and complicated the Federal Reserve's plans to gradually raise interest rates.
Many analysts had expected the Fed to raise the short-term rate it controls as early as June. But Friday's figures may make that less likely.
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