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U.S. created fewest number of jobs in seven months in April

April's job growth was slowest in seven months; Walmart to bring back store greeters; NYC shoppers to pay 5-cent fees for plastic bags
April's job growth was slowest in seven month... 01:08

U.S. employers added only 160,000 jobs in April, the fewest in seven months and less than the expected 200,000, with muted economic growth inspiring companies to expand their payrolls at a more modest pace.

The unemployment rate remained unchanged at 5 percent.

"It certainly is a disappointing top-line number, but as you look deeper, I don't think it's as bad as the initial reaction," JJ Kinahan, chief strategist at TD Ameritrade told CBS MoneyWatch.

The private sector created 171,000 jobs last month, while the government shed 11,000 jobs, "that is really where the disappointment lies," Kinahan noted.

One positive aspect of the data is the three primary areas of job creation involved sectors that typically include higher wages and benefits: professional and business services, health care and financial services. "We are creating careers, not just jobs, I think that's a positive," said Kinahan.

Conversely, employment in mining fell by 7,000 in April, with the industry down 191,000 jobs since hitting its peak in September 2014.

"It's just another in a long, long line of good, not great, reports," said Scott Wren, senior global equity strategist at Wells Fargo Investment Institute. "It confirms the economy is moving ahead at a modest pace, it's status quo for where it's been for four years."

Friday's Labor Department report follows data earlier in the week from payroll processor ADP, which found U.S. companies added jobs at the slowest pace in three years in April.

"Wednesday's ADP was not an outlier but we'll of course have to wait until next month to see if a job hiring trend change is upon us," Peter Boockvar, chief market analyst at the Lindsey Group, emailed. "Considering the growing likelihood that GDP growth this year will be less than 2 percent and revenue and earnings are falling, it would make sense that it is."

"The real question is how long-lasting will this soft patch be," Mark Hamrick, senior economic analyst at Bankrate.com, emailed. "On the positive side, we saw a modest rise in wage growth with average hourly earnings up 2.5 percent over the past year. That's not a jackpot for American workers, but it is progress."

Average hourly earnings rose 8 cents to $25.53 last month; in March earnings rose 6 cents.

On the negative side, tallies from the prior two months were revised lower, with February recast lower by 12,000 to 233,000 and March revisited and lowered by 7,000 to 208,000.

The report solidified the market's view that a June interest rate hike by the Federal Reserve is highly unlikely.

Fed Fund futures earlier in the week cast the probability of a Fed increase next month at 11 percent, and were now at six percent, while November is down to 32 percent and December at 52 percent.

While employment growth was solid in the first three months of the year, many of those jobs were in lower-paying fields. The retail industry has accounted for nearly a third of private payroll growth in 2016, according to Deutsche Bank, noting that the sector makes up some 13 percent of private employment. Restaurants, hotels, and other leisure and hospitality companies were the second-largest contributor to job growth in the first quarter, accounting for 20 percent of payroll gains.

The labor market has been a bright spot in an otherwise fairly bleak economic picture this year. The economy expanded a meager annualized 0.5 percent between January and March, the third straight year of anemic first quarter-growth, amid shrinking corporate profits and mounting concerns about a global downturn.

With growth faltering, the Federal Reserve recently cut its full-year GDP forecast to 2.2 percent, which would fall short of the 2.4 percent rate of growth in 2015 and 2014. A number of private forecasters have ratcheted back their projections even more.

Despite the early-year swoon, many economists and market analysts expect the economy to gain speed over the rest of the year, powered by rising wages and healthy consumer spending.

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