EXPLAINER: More pressure on the Fed from April jobs report

The April jobs report provided mixed signals on the economic issue most on the minds of Americans: Chronically high inflation

WASHINGTON -- Friday's jobs report for April provided mixed signals on the economic issue most on the minds of Americans: Chronically high inflation.

On the one hand, the proportion of people either working or looking for work slipped in April after a string of increases. Having fewer people in the workforce means employers need to raise pay to try to fill a record-high number of open jobs. Companies typically then pass on those higher labor costs to consumers in the form of higher prices.

On the other hand, average hourly pay increases slowed last month and have weakened over the past three months, a trend that could ease inflationary pressures.

The offsetting trends come as the Federal Reserve has accelerated its fight against inflation, which has surged to a four-decade high. This week, the Fed raised its key interest rate by a half-percentage point — its most aggressive move since 2000 — and signaled further large rate hikes to come. Higher rates can slow borrowing and spending but also risk causing a recession.