U.S. employers are set to put the brakes on hiring over the coming months, amid increasing concerns the economy may tip into recession as the Federal Reserve sticks to its inflation fight.
The Labor Department estimated that around 253,000 new jobs were created last month, with around 230,000 coming from the private sector, with headline unemployment falling to 3.4%.
Wages were up, too, with average hourly earnings rising 4.4% from last year to $33.36, suggesting companies are still paying more to lure reluctant workers from the job market sidelines.
However, digging deeper into the numbers suggests a grimmer picture: The Labor Department took back 150,000 jobs from its March and February estimates, suggesting hiring has slowed notably since the beginning of the year, when it peaked at 517,000.
“The size of the Feb/Mar revisions, however, serves as a reminder not to take the initial monthly prints seriously; what matters is the trend, and it is slowing,” said Ian Shepherdson of Pantheon Macroeconomics. “The trend in unemployment is flat, but it will rise over the next few months as (jobs) growth slows further.”
Add to Concern: Labor Productivity Drops
Adding to the concern, the Labor Department noted earlier this week noted that employers are getting less out of workers that they have to pay more for.
