Job creation in the US accelerated last month, a sign that the labor market remains surprisingly resilient in the face of rising interest rates, chronic inflation, multiple bank failures and mounting economic uncertainty.
Despite those headwinds, total employment rose by no less than 253,000 jobs in April. That was well above what economists had predicted, and an increase from the solid 236,000 new jobs created in March.
The unemployment rate ticked back to 3.4 percent, marking a six-decade low of 3.5 percent the month before, according to the Labor Department’s labor situation report on Friday.
Wall Street’s major stock indices rallied higher after the report, with the Dow Jones Industrial Average gaining more than 300 points shortly after the opening bell.
The labor market has so far resisted the Federal Reserve’s aggressive push to quell high inflation, which reached a four-decade high last year and remains well above the Fed’s 2 percent target.
Total employment increased by no less than 253,000 jobs in April. That was well above what economists had predicted, and an increase from March’s solid figure
The unemployment rate ticked back to 3.4 percent, marking a six-decade low
On Wednesday, the Fed raised its benchmark rate for the 10th consecutive time since March 2022, further increasing borrowing costs for businesses and consumers – yet employers continue to hire.
Fed Chairman Jerome Powell himself this week sounded somewhat baffled by the sustainability of the job market in the face of rising interest rates.
“We’ve raised rates by 5 percentage points in 14 months,” Powell said at a news conference Wednesday. “And the unemployment rate is 3.5 percent — about where it was, even lower than when we started.”
The unemployment rate has ranged from 3.4 percent to 3.7 percent since rate hikes began in March 2022, a historic low pointing to the tightness of the labor market.
“It’s a jack-in-the-box job market: it just keeps spinning until a surprise finally pops up,” Dave Gilbertson, vice president of payroll company UKG, told DailyMail.com.
“New job creation picked up in April, defying consensus expectations for a cooling labor market,” he added. “In particular, we see a healthy economy on the front line, with a workforce that is in high demand and that remains empowered.”
While a strong labor market is good for workers, it can complicate the Fed’s inflation battle by continuing to put upward pressure on wages, ultimately translating into higher prices for consumers.
The April jobs report showed average hourly wages were up 0.5 percent on the month, following a 0.3 percent increase in March. Wages rose by 4.4 percent in April from a year ago, after an increase of 4.3 percent in March.
Job creation in the US accelerated last month, a sign that the labor market remains surprisingly resilient despite challenges
According to the new data, employment continued to rise in April in professional and business services, health care, leisure and hospitality, and social assistance.
Professional and business services, a category that includes technical, management and administrative roles, added a robust 43,000 jobs this month.
Healthcare added 40,000 new jobs, while the leisure and hospitality sector grew by 31,000 jobs, mostly in restaurants and bars.
April’s total employment growth flew in the face of rising layoffs in the tech and financial sectors, suggesting that laid-off workers are still relatively easy to find new employment.
Separate data from the Labor Department on Tuesday showed layoffs rose to 1.8 million in March, the highest level since December 2020.
The report also showed that the number of job openings in the country is declining, albeit slowly, in a sign that the red-hot job market is losing steam.
Employers posted 9.6 million vacancies in March, up from almost 10 million in February and the lowest number since April 2021.
Still, that number of job openings means there are 1.68 open positions for every unemployed person seeking employment in the country.