In April, the growth in US employment slowed significantly, further indicating signs of economic deceleration. Despite a continuous rise in inflation data earlier this year, which at one point shattered the optimistic expectations for economic growth and inflation easing seen at the end of last year, April's CPI came in slightly lower than expected, providing some relief to investors. However, weak retail sales data released on the same day further proved that consumers are under pressure from multiple factors.

Although the slowdown in inflation was disappointing in its pace, the trend remains evident. Over the past 14 months, the core CPI, excluding food and energy, has either decelerated or remained relatively stable. The core CPI in April grew by 3.6% year-on-year, marking the slowest pace since April 2021.

Employment growth in April slowed significantly, especially in the leisure and hospitality sector, with only 5,000 jobs added, far below the 53,000 added in the previous month. Fed data shows that industrial production remained flat in April, below expectations, and March's growth data was also revised downward. Capacity utilization decreased from 78.5% in March to 78.4%.

Additionally, retail sales in April remained flat compared to March, with a year-on-year growth of 2.7%, below the expected 0.4%. The "control group" of retail sales, preferred by economists, grew by 3.5% year-on-year, also lower than March's 4.8%, consistent with recent reports of consumer spending slowdown from companies like Starbucks, McDonald's, and Home Depot.

According to data from the CME Fed Watch Tool, the futures market expects a 75.3% probability of a Fed rate cut at the September meeting, up from 65.1% the previous day. There is still a possibility of a rate cut at the July meeting, with a probability of 34.9%. This implies that there are two full months of data available for reference before the July meeting.