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115k Payrolls Crush Forecasts, But Wage Calm Caps Dollar
115k payrolls beat 60k consensus, but 0.2% mom wage growth softens hawkish impulse. Dollar initially rallies then fades; focus moves to core CPI.
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US job growth slowed in April but crushed expectations, with Non-Farm Payrolls rising by 115k against a consensus forecast near 60k. The prior month’s reading was revised higher from 178k to 185k, adding to the picture of a labor market that remains far more resilient than many anticipated. The unemployment rate held at 4.3%, though the participation rate dipped to 61.8% from 61.9%.
115k Payrolls Crush Forecasts, Revise March Higher
The headline easily cleared the 60k consensus, and upward revisions to March added 7k jobs to the prior total. The simple read would be that the Fed cannot afford to pause or pivot anytime soon. A labor market still generating six-figure job gains, even after months of elevated interest rates, suggests the economy is running hot enough to keep wage and price pressures alive. In the minutes after the release, rate futures briefly priced a higher probability of another hike, and the dollar surged across the board.
Wage Growth Takes the Edge Off the Hawkish Impulse
But the better market read came from the wage data. Average hourly earnings rose just 0.2% month-on-month, unchanged from the prior month and below the 0.3% forecast. The year-on-year rate ticked up to 3.6% from 3.4%, but that owed as much to base effects as to fresh momentum. For the Fed, the critical detail is that monthly wage growth is not accelerating. That weakens the case for a wage-price spiral and gives the FOMC room to wait and see how past tightening flows through service-sector inflation.