Strong April Jobs Report Narrows the Fed's Path to Rate Cuts
US April nonfarm payrolls rose 115,000, beating forecasts for a second straight month. The reading dents the case for rate cuts and forces investors to reprice the Federal Reserve's path. Markets now treat even a single 2026 cut as far from certain.
Nonfarm payrolls rose by 115,000 in April, topping consensus near 100,000, the Labor Department said. Upward revisions to February and March completed a picture of a labour market that has remained resilient through the spring despite warnings of a slowdown.
The print swiftly trimmed rate-cut expectations. CME FedWatch probabilities for a September cut fell sharply within hours. Wall Street strategists argue the Powell-led Fed has little appetite to ease while core inflation lingers near 3% and tariff-driven price pressures cloud the outlook.
The picture is not one-sided. The University of Michigan consumer sentiment index undershot expectations in early May, and a jump in wholesale inventories hinted at softer underlying demand. Next month's CPI report will be the last major signal before the Fed's July meeting.
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