US non-farm payrolls rise a less-than-forecast 160,000 in April

The US added less jobs than expected in April as the struggling mining sector continued to reduce its labour force, according to official data on Friday.

The US non-farm payrolls increased 160,000 last month, compared to forecasts of 200,000 and 215,000 in March, the Labor Department revealed.

An increase in jobs at professional and business services, health care, and financial activities was offset by a continued loss in mining jobs. The mining sector has been cutting jobs to lower costs amid a slump in commodities prices.

Meanwhile, the unemployment rate was unchanged at 5.0%, as anticipated by analysts.

Average hourly earnings rose 2.5% year-on-year in April, beating forecasts for a 2.4% increase and following a 2.3% gain in March. On the month, however, hourly earnings growth remained at 0.3%, in line with estimates.

June rate hike now off the table, analysts say

“An interest rate hike next month is now looking unlikely as the general economic waters are far from calm," said Dennis de Jong, managing director at UFX.com.

"Weak growth at home and overseas is a major concern, as is poor manufacturing output, so Janet Yellen and the Fed are expected to keep the interest rate pause button pressed for a little longer.”

"On net, the softening in April payroll growth, led by the service-providing sector, will likely raise concerns over the sustainability of US growth.

"We now only expect one rate hike in 2016, in September, down from two hikes previously, as we believe it will take longer for policymakers to accumulate sufficient evidence that economic and labor market activity is rebounding after a soft start to the year," Michael Gapen, Rob Martin and Jesse Hurwitz at Barclays said in a research report sent to clients.

"If the economy improves along the lines of our baseline forecast, there is a risk of a second rate hike this year in December" they added.