Wage growth came in far below estimates according to Friday’s jobs report. Unemployment inched up in April, breaking the trend of strong jobs reports over the past year.  The silver lining is that this trend is good news for mortgage rates.

The U.S. economy added 175,000 jobs in April, far below the average monthly gain of 242,000 over the past 12 months.  This was well below what economists had expected.

Additionally, Wednesday’s Job Openings and Labor Turnover survey (JOLTS) showed that the number of job openings across the country fell to a three-year low in March and the number of people quitting their jobs has started to decline.

The Federal Reserve’s Federal Open Markets Committee (FOMC) maintained its short-term policy, holding interest rate steady at a range of 5.25% to 5.5% for a sixth consecutive meeting on Wednesday.

The latest economic report gave the Fed enough confidence to not raise rates. However, “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%“ the FOMC said in a statement. “In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities.“

According to Chairman Powell, although upward movements in inflation are noteworthy, considerable progress toward the Fed’s 2% target has been made.

“It’s unlikely that the next policy rate move will be a hike,” Powell told journalists on Wednesday during the FOMC’s press conference. “In order to hike the rates, we would need to see persuasive evidence that our policy stance is not sufficiently restrictive to bring inflation sustainably down to 2% over time. That’s not what we are seeing at the moment.”

While Powell emphasized the unlikelihood of future rate hikes, he also remained vague about the Fed’s future interest rate trajectory.

“We didn’t see progress in the first quarter. It appears that it will take longer for us to reach that point of confidence,” Powell said. “I don’t know how long it will take. … My personal forecast is that we will begin to see progress on inflation this year. I don’t know that it will be enough to cut rates; we will have to let the data lead us on that.”