In brief, here are four key aspects of the U.S. labor market data for April released Friday morning:
A relative shortfall on job creation: The number of jobs added last month—160,000—undershot consensus expectations of 200,000. Moreover, revisions subtracted 19,000 jobs from the reports for March and February, which reduced the monthly average for the year to 192,000.
Not all the news was bad: The April report wasn't entirely disappointing. Notably, wages gained 0.3 percent, bringing the annual increase to 2.5 percent. And long-term unemployment fell by 150,000.
It makes life harder for the Federal Reserve: These competing forces complicate the U.S. central bank's deliberations about the timing of further interest-rate increases. The conflicting data make the jobs report for May, which will be released next month, an even more important input for the June meeting of the Federal Open Market Committee.
Markets may have over-reacted: Rather than wait for policy signals, fixed-income markets immediately followed the report's release by sharply lowering the probability of a rate hike in 2016. I suspect that this is an over-reaction. It is too early to rule out the likelihood of one or even two increases this year.
Mohamed El-Erian is chief economic advisor at Allianz SE.