-Moody's Analytics Inc
The US labour market lost steam in April, as the world's biggest economy created the fewest number of jobs in seven months and Americans dropped out of the labour force, casting doubts on whether the Fed will hike interest rates before the end of the year. According to the Labor Department, non-farm payrolls rose by 160,000 jobs last month as construction employment barely climb and the retail sector shed jobs. That was the smallest gain since September and below the first-quarter average job growth of 200,000. Moreover, employers appeared to add 19,000 fewer jobs in February and March than previously estimated. While the unemployment remained unchanged at 5.0% it came at cost of people dropping out of the labour force. The share of Americans participating in the labour force dropped to 62.8% in April from 63.0% in March. Average hourly earnings of private-sector workers climbed by 8 cents last month, or 0.3%, to $25.53. From a year earlier, wages grew 2.5%, a firmer gain than March's rise, albeit below the 3.0% advance that economists say is needed for inflation to climb to the Fed's 2.0% target.
The Fed has so far refrained from lifting its benchmark interest rate this year, after December's hike. Officials welcomed the labour market's improvement last month, but remain concerned about sluggish economic activity and tepid inflation.
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