-- The U.S. economy added fewer jobs than anticipated in April, potentially impacting when markets expect the Federal Reserve to roll out possible interest rate reductions this year.

The Labor Department's closely-monitored labor market report showed that came in at 175,000 last month, down from an upwardly revised total of 315,000 in March. Economists had predicted a reading of 238,000.

Meanwhile, the was 3.9%, accelerating slightly from 3.8% in the prior month. The figure was projected to equal March's pace. However, it marked the 27th consecutive month that the jobless rate has been below 4%.

Growth in also registered 0.2% month-on-month, slowing from 0.3% in March. The number was estimated to be in line with the previous month.

Cooling labor demand has been a key goal of a rate tightening cycle by the Fed, with policymakers hoping that the softening may alleviate upward pressure on inflation. As such, recent resilience in the job market has partly persuaded Fed officials to shy away from interest rate reductions that were initially expected earlier this year.

On Wednesday, Fed Chair Jerome Powell noted that while sticky inflation has dented chances of an imminent cut, it was "unlikely" that the central bank will once again hike borrowing costs.

Traders reacted to the report by bolstering bets that the Fed could slash rates by as much as 50 basis points -- or two 25-basis point reductions -- this year.

"[F]urther clarity will be needed to understand the depth of the slowdown [in the labor market]," Thomas Monteiro, Senior Analyst at , said. "However, should the Fed find itself amid a stagflationary economy, it will have no doubt about its priorities, and that should be employment."

U.S. stock futures were pointing higher in the wake of Friday's data, while U.S. Treasury yields fell. Yields typically move inversely to prices.