11:08 AM EDT, 05/03/2024 (MT Newswires) -- The US economy added fewer jobs than expected last month while wage growth eased in what will likely be a welcome sign for Federal Reserve officials seeking more progress on inflation before considering interest rate cuts.

Total nonfarm payrolls climbed by 175,000 in April, the Bureau of Labor Statistics reported Friday. The consensus was for a 240,000 gain, according to a survey compiled by Bloomberg. March's gains were revised up by 12,000 to 315,000 but dropped by 34,000 for February.

Private payrolls rose by 167,000 in April, decelerating from March's growth of 243,000 and missing the consensus for a 195,000 gain. The unemployment rate came in at 3.9%, up from 3.8% the month prior, which was the market's expectation for April. The service industry added 153,000 jobs, down from 204,000 the month prior, while the goods-producing sector added 14,000, dropping from 39,000 in March.

"The US job engine lost a bit of momentum in April, with payrolls printing below the (200,000) mark for the first time in five months," TD Economics Senior Economist Thomas Feltmate wrote in a note. Job gains have still averaged 242,000 over the past three months, which is "only a modest step down" from the first quarter's 269,000 level, he said.

Average hourly earnings growth slowed to 0.2% sequentially from March's 0.3% rate, which was the pace modeled by analysts for April. The annual measure eased to 3.9% from 4.1%, below the Street's 4% view.

"Importantly, wage growth decelerated a bit more than expected last month," Feltmate said. "This will be welcome news for Fed officials -- particularly after other data points out this week including the Employment Cost Index showed an uptick in wage pressures more recently."

On Thursday, US Department of Labor data showed weekly applications for unemployment insurance were flat while a separate report from Challenger, Gray & Christmas showed April layoffs plunged 28% from March.

Earlier in the week, the Federal Reserve's monetary policy committee held benchmark interest rates steady for the sixth straight time, citing a lack of further progress on inflation in recent months. The market widely expects the Federal Open Market Committee to keep rates unchanged at its meeting in June, according to the CME FedWatch Tool.