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  • Writer's pictureRealFacts Editorial Team

Key Indexes Raise as Labor Market Softens

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The April jobs report released by the Labor Department revealed that the U.S. economy added 175,000 jobs during the month, falling short of the expected 243,000 and marking a decline from March's addition of 303,000 jobs. Consequently, the unemployment rate inched higher to 3.9%, contrary to the anticipated steady rate of 3.8%. This weaker-than-expected performance in job growth suggests a notable softening in the labor market, which gives many investors hope that the Fed will cut sooner rather than later.

Jed Graham, Investors Business Daily author, noted, “After the April jobs report, markets are pricing in 42% odds of a rate cut by the July 31 Fed meeting, up from 32% ahead of the jobs data,  according to CME Group's FedWatch page. Odds of a rate cut by the Sept. 18 Fed meeting rose to 73% from 62%.” Additionally, Graham pointed out that the likelihood of at least two quarter-point Federal Reserve rate cuts this year surged from 52% to 66%. The reaction in financial markets was swift, with major indexes rising by over a percent and the NASDAQ surging by 2%. Additionally, the 10-year Treasury yield dropped over 6 basis points to approximately 4.51%, following an intraday low of 4.45%.

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