U.S. Adds 160,000 Jobs in April, Fewer Than Expected

Image: California Amusement Park Holds Job Fair To Hire 2500 Employees
A job seeker waits to be interviewed during a job fair at California's Great America theme park on February 6, 2015 in Santa Clara, California.Justin Sullivan / Getty Images

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/ Source: CNBC.com
By Jeff Cox, CNBC

The U.S. economy created just 160,000 jobs in April, lower than economist expectations, while the unemployment rate held steady at 5 percent.

On the bright side, wages rose during the month, with average hourly earnings up 8 cents an hour, representing a 2.5 percent annualized gain. The average work week edged higher to 34.5 hours, according to the Bureau of Labor Statistics, which issues the monthly jobs report.

Those counted as not in the labor force surged by 562,000 for the month to more than 94 million.

Stock futures briefly fell after the report but regained some ground as Wall Street prepared for a lower open. Traders in the fed futures market pulled back expectations even more, estimating only a 50-50 chance that the U.S. central bank would hike rates even once this year.

Read More from CNBC: Rate Hike Odds Plunge After April Jobs Report Badly Misses Estimates

"The headline number was definitely disappointing, and all but erases any chance of a rate hike in June," said Chris Gaffney, president of world markets at EverBank. "Without any real wage pressure and the uncertainty of a presidential election in the fall I think the (Federal Open Market Committee) will be forced to sit on their hands until the end of the year. This confirms we will have lower rates for longer — more of the same."

A separate measure of unemployment that includes those working part-time for economic reasons as well as discouraged workers — often referred to as the "real" unemployment rate — fell one-tenth of a point to 9.7 percent. The labor force participation rate, which had been on the rise in recent months, fell to 62.8 percent, its lowest level since January. The total labor force contracted by 362,000.

Wall Street had expected the nonfarm payrolls report to show growth of 202,000 and the jobless rate to remain unchanged at 5 percent. Just a day before the report came out, Goldman Sachs said estimates were too low, with the firm projecting that April would show a gain of 240,000.