U.S. employers added 128,000 jobs last month. The unemployment rate inched up to 3.6%. The drop in job creation reflects a slowing economy, but a strike at General Motors was also a factor.
The quarter-percentage-point cut will lower borrowing costs for households and businesses. The move is an effort to prolong the decade-old economic expansion in the face of rising headwinds.
The Federal Reserve chairman is testifying before Congress this week about challenges the economy faces. Stocks rallied in anticipation the central bank will lower interest rates later this month.
The Federal Reserve left rates alone, despite pressure from President Trump to pump more money into the economy. But the central bank signaled a willingness to cut rates in the future if needed.
The Commerce Department says the U.S. economy picked up steam in the first three months of the year. GDP grew at an annual rate of 3.2% in the first quarter, up from 2.2% at the end of 2018,
President Trump is eager to tout a fast-growing economy, boosted by the tax cuts he pushed through Congress. That makes Friday's report on gross domestic product a highly anticipated news event.
A long trade war that results in higher, broader tariffs "will be bad for our economy and for other economies too," Federal Reserve Chairman Jerome Powell said at a Senate hearing Tuesday.
The last time the U.S. jobless percentage sat below 4 percent was in December of 2000. April brought net job gains, but fell short of economists' predictions.