On May 3, the U.S. Department of Labor Statistics released its monthly jobs report for April. The federal agency, charged with tracking employment numbers, reported that the unemployment rate is at 3.9%, with 6.5 million Americans unemployed in April.

The report also mentioned that since August 2023, the unemployment rate has stayed between 3.7% and 3.9%. Employers hired a net 175,000 people in the U.S. in April, down from 315,000 in March. 

Investors reacted to the news positively — according to CNBC, major American stock indexes such as the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite all made gains on May 6. Investors take the fewer jobs added in April as an indication that the economy is finally on its way to a “soft landing” after experiencing significant inflation. 

This, in turn, led investors to believe that the Federal Reserve will cut interest rates soon. An interest rate cut would make it easier for businesses to borrow money and expand their operations, raising the companies’ value. 

On May 6, John Williams, the President of the Federal Reserve Bank of New York, said that the Federal Reserve will cut interest rates in the future. On May 3, Williams said that the Federal Reserve is working toward achieving a 2% inflation rate.This all comes as many Americans continue to feel negative about the economy. The Consumer Sentiment Index — a measure of how people feel about the economy— was 79.4 in March, compared with 101 in February 2020 before the COVID-19 pandemic. It goes to show that unprecedented highs in the stock market do not necessarily mean economic confidence for the average American.