A report showed that the U.S. has the lowest number of jobs from October to April, augmenting existing fears of economic slowdown.
The U.S. Labor Department reported that there was only a slight increase in construction jobs, while the retail sector has been laying off employees since December 2014. Non-farm payrolls amounted to 160,000 in April compared to 215,000 workers in March, when the Labor Department reported that the work force was experiencing an upward trend.
Expected Rate Hikes
Since September 2015, there have been few job gains. However, April's numbers is the lowest ever and below the recorded first three-month average employment growth, which is at 200,000. In February and March, employment opportunities dropped by 19,000, the report said.
Several factors, including low productivity, meager corporate gains and slow economic growth, contributed to job hiring decline. This has forced known financial companies to reduce interest rate hikes expectation to one.
"We now only expect one rate hike in 2016, in September, as we believe it will take longer for policy makers to accumulate sufficient evidence that economic and labor market activity is rebounding after a soft start to the year," Barclays' chief economist Michael Gapen said.
In December 2015, Federal Reserve officials predicted that there will be two additional rate increases for 2016, however. The first rate hike will happen in June said the economists.
Reuters conducted a survey involving Wall Street banking institutions directly working with the Feds and showed that more than half of the banks expect the central bank to impose strict monetary policies two times this year.
The Feds scheduled June 14-15 meeting is expected to discuss market-based measures of a probable September rate increase.
The Labor Force
The employment rate was kept at 5 percent in April because people became unemployed.
Those who are still in the job force can rejoice in the fact that average workweek and average hourly earnings will continue an upward trend.
The report said there was an increase of 0.3 percent or 8 cents in average hourly earnings, while the average work week jumped to 34.5 hours. These combined numbers equate to a 0.7 percent increase in employees' net wages.
Economic analysts are not surprised that there is a slowdown of job creation because there were only few business investments and lack of skilled workers.
Job creation depends on booming business growth and development said Lindsey Piegza, Stifel Fixed Income's chief economist. Some economists, however, believe that decline in employment was a rebound from winter weather hiring.
The report also stated that the number of Americans employed or seeking a job declined by 0.2 percent. The labor force dropped by 362,000 in April. From a seven-year high of 59.9 percent in March, the employment-to-population ratio dipped to 59.7 percent in April.
The report stated that unemployment rates, which include individuals who are seeking part-time jobs and those who gave up job hunting was only 9.7 percent. Private services sectors had the most job gains last month with 174,000 new jobs, while retail sectors slipped by 3,100. Employment in the information sector remained unchanged.
Manufacturing businesses, after removing 29,000 jobs in March, had 4,000 more jobs last month.
"Manufacturers are pretty cautious right now about the overall economy," said Chad Moutray, National Association of Manufacturers chief economist. "They are pulling back on both hiring and capital spending based off of really weak numbers on demand."
The mining industry has shed 191,000 jobs since September 2014. Employment in construction rapidly slowed down, adding only 1,000 jobs in April, while government employment removed 11,000 jobs last month.
