U.S. financial markets are tumbling in early trading today on the heels of a sluggish jobs report.
Nonfarm payrolls only added 115,000 people in April, well short of the 168,000 new employees economists were projecting. The 115,000 new jobs in April trailed the 154,000 jobs added in March and were less than half the 259,000 jobs added in February. Both of those numbers were revised higher today.
The good news – and news that is likely preventing stocks from falling too far – is that the unemployment rate dipped to a three-year low of 8.1%. Not since February 2009 has the rate been that low. The drop is in line with the Fed’s belief that unemployment is headed below 8% before the year is out.
Despite the unemployment drop, the job growth slowdown is a concern. Governments actually cut payrolls by 15,000. Only the professional and business services sector made any real progress, adding 62,000 jobs.
If you include part-time workers, the unemployment rate stayed the same at 14.5%.
The numbers point to slower growth in the U.S. economy than we’ve seen in months. The 115,000 jobs added in April are well off the 197,000 average over the past six months. This marks the third straight month that hiring has slowed.
So far the Nasdaq has been impacted most by the poor jobs data. The index was down 1.4% in early trading and still falling. S&P 500 stocks were down an even 1%. The Dow has slipped 0.8%.