US unemployment rate expected to fall to 3.5% in April
The U.S. unemployment rate likely dropped to its pre-pandemic low of 3.5% in April, while job growth moderated to a still brisk pace amid widespread worker shortages, underscoring the challenge the Federal Reserve faces to curb high inflation.
The Labor Department’s closely watched employment report on Friday is also expected to show wages rose solidly last month and highlight the economy’s strong fundamentals despite a drop in gross domestic product in the first quarter.
“Consumers have money to burn and businesses are trying to hire people, but labor shortages are, if anything, getting worse,” said Sung Won Sohn, a finance and economics professor at Loyola Marymount University in Los Angeles. “I think we are seeing the beginning of a wage price spiral, and it is going to be a tough nut to crack, even for the central bank.”
Nonfarm payrolls likely increased by 391,000 jobs last month after rising 431,000 in March, according to a Reuters survey of economists. That would mark a slowdown from the first-quarter average gain of 562,000 jobs per month and snap an 11-month streak of payroll gains in excess of 400,000. Estimates ranged from as low as 188,000 jobs added to as high as 517,000.