After racing ahead for many months, the American jobs machine cooled in April, as employers took their cue from other signs that economic growth was slowing by easing up on new hiring.
The 160,000 increase in payrolls in April reported by the Labor Department on Friday followed the best two-year stretch for the job market since the tech-fueled boom of the late 1990s.
The unemployment rate, which is tied to a separate survey of households, was unchanged at 5 percent.
“It’s a soft report but it doesn’t portend a turn in the labor market,” said Michael Gapen, chief United States economist at Barclays. “I’d be more concerned if there were weakness across the board, but there wasn’t.”
Late last month, the government reported that the economy barely expanded in the first quarter. But most experts say the gains in the labor market in recent months are a more reliable sign, suggesting that the economy will continue to expand for the rest of 2016, and that the pace of growth will pick up modestly from the stagnant start to the year.
April’s slower but still steady pace of payroll growth could be a sign of things to come. With economists expecting the economy to grow at an annual rate of 1.5 to 2.5 percent for the balance of 2016, monthly job gains may fall from the 192,000 pace registered so far this year.
The latest jobs data is likely to leave the Federal Reserve waiting for further signs of a pickup in activity before moving ahead with any interest rate increases. Fed officials will see one more jobs report before their next meeting in June.
William C. Dudley, president of the Federal Reserve Bank of New York, said in an interview on Friday that the latest government data demonstrated that the labor market continued to improve gradually, in line with the Fed’s expectations.
“It’s a touch softer, maybe, than what people were expecting, but I wouldn’t put a lot of weight on it in terms of how it would affect my economic outlook,” he said.
Mr. Dudley added that it remained a “reasonable expectation” that the Fed would increase its benchmark interest rate two times this year.
The Labor Department also revised downward its estimate of the number of jobs added in February and March by 19,000.
Diane Swonk, an independent economist in Chicago, pointed to the strong gain of 67,000 jobs in the business and professional services category as additional evidence that the broader slowdown in hiring last month was not an ominous sign of trouble ahead.
“The quality of the jobs improved but the quantity did not,” she said, adding that the health of this heavily white-collar sector helped explain why wage growth was also robust.
The 0.3 percentage point rise in average hourly earnings was the most positive sign of the economy’s trajectory in Friday’s report.
Until recently, wages had been a sore point throughout the nearly seven-year-old recovery, barely rising in real terms despite the big drop in the unemployment rate.
The change in earnings in April suggested that the upward tick in wages was not a fluke. Over the last 12 months, wages are up 2.5 percent, well ahead of the pace of inflation.
In addition to a tighter labor market, which has prompted some major employers to raise their wage floor, dozens of states and cities either have already carried out or are considering increases in the minimum wage. Combined, those forces are helping push up pay at the low end of the job market.
“We’ve hit a tipping point,” Ms. Swonk said. “It’s showing up in low-wage jobs, for waiters and waitresses, in retail and in leisure and hospitality.”
“The good news is that we are re-engaging people who’ve been on the sidelines,” Ms. Swonk added.
States including California, Colorado, Michigan and Massachusetts increased their minimum wages at the start of 2016. Maryland and the District of Columbia are set to enact raises on July 1.
At a news conference Friday at the White House, President Obama said he was pleased that the United States economy had added 160,000 jobs in April, though he cautioned that “the global economy, as many people here are aware, is not growing as fast as it should be.”
“Here in the United States, there are folks out there who are still hurting,” Mr. Obama said, “and so we’ve got to do everything we can to strengthen the good trends and to guard against some dangerous trends in the global economy.”
With the race to succeed President Obama now moving from the primary phase into the general election campaign, the April jobs report contained fodder for candidates in both parties.
Democrats can point to the rise in wages as evidence that conditions are improving, but the slowdown in hiring, particularly among manufacturing industries, and a large drop in the number of Americans in the work force may add to complaints among blue-collar workers that they are being left behind.
The proportion of Americans in the labor force dropped last month to 62.8 percent from 63 percent in March, partly reversing a rebound that began last fall after the participation rate hit lows last seen in the 1970s.
Like the unemployment rate, participation in the labor force is measured in the Labor Department’s household survey, which is separate from the survey of businesses that is used to calculate the change in payrolls.
Although the two tend to correlate over time, the household data is more volatile than the payroll survey, and April was no exception. It showed more than half a million people leaving the labor force.
For college-educated workers, many of them supporters of Hillary Clinton and Senator Bernie Sanders on the Democratic side, the already low jobless rate declined even further to 2.4 percent. The unemployment rate for Americans with a high school diploma, who have contributed to the crowds supporting the G.O.P. standard-bearer Donald Trump, was unchanged at 5.4 percent.
The unemployment rate for workers without a high school diploma increased slightly to 7.5 percent in April, continuing a rise from 6.7 percent at the end of 2015.
The payroll numbers and the unemployment rate tend to dominate the headlines, but the Federal Reserve also pays close attention to the participation rate.
While Mr. Dudley, the New York Fed president, left open the possibility of higher interest rates in June, economists predicted that April’s softness might persuade Janet L. Yellen, the Fed chairwoman, and her colleagues to remain cautious about future rate increases.
After the report, Barclays told clients in a note that the April data put a rate increase in June “off the table” and the that bank now expected only one interest rate increase by the Fed this year.
Some notable pockets of weakness remain in the nation’s economy.
In the first three months of 2016, factories shed 47,000 jobs, hurt in part by a stronger dollar and weaker overseas demand. Manufacturing employment rose by 4,000 in April. The oil patch is still reeling from the impact of sharply lower energy prices, despite a recent rebound. Other commodity-based industries like metals and mining are also hurting.
Between January 2015 and March 2016, the mining and logging industry lost 170,000 jobs. In April, miners and loggers cut another 8,000 jobs.
Public sector employment unexpectedly fell by 11,000. And pacesetters with big gains in previous months, like retailers, hit the brakes on new hiring.
When approximately 40,000 Verizon workers went on strike last month, it was right in the middle of the week that government number crunchers analyze to gauge the strength of the job market.
Before the report, some economists predicted that the strike could have a modest impact on the numbers. Mr. Gapen, the Barclays economist, said he did not think that was the case, because the telecommunications industry did not register a big drop in employment.
In hot fields like health care, technology and professional services, employers are scrambling to find new employees. In Chicago, ContextMedia, which provides tablets and digital wallboards for doctors’ offices, brought 25 new employees aboard in April. The company plans to add about 100 workers a quarter for the rest of 2016, said Iman Jalali, the company’s chief of staff.
“We’re trying to attract talent from across the country,” he added. “We’ve got some of the best people in Chicago, but when you are growing so quickly, you need to keep growing the pool.”
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