Friday, May 5, 2023

US adds 253,000 jobs in April

The U.S. economy added 253,000 jobs in April, surpassing analyst forecasts of 180,000 new jobs, according to Labor Department data released Friday.

The unemployment rate remained historically low at 3.4 percent, down from 3.5 percent the previous month. 

The jobs report reveals that the economy is slowing, but the labor market remains surprisingly robust.

The unemployment rate for Black Americans dipped slightly to 4.7 percent, a record low. That’s a huge recovery from the onset of the pandemic, when the Black unemployment rate spiked to 16.8 percent in May 2020.

Wage gains also came in slightly stronger than expected. Hourly earnings rose 0.5 percent in April and are up 4.4 percent over the last 12 months.

“Once again, the job market has turned heads with its resilience,” Bankrate senior economic analyst Mark Hamrick said in a note.

The report also showed that previous months’ job gains weren’t nearly as strong as they were initially reported. The Labor Department revised down March job gains from 236,000 to 165,000. February job gains fell from 326,000 to 248,000.

“With these revisions, employment in February and March combined is 149,000 lower than previously reported,” the Bureau of Labor Statistics noted.

The Federal Reserve’s interest rate hikes aimed at slowing the economy and taming inflation are impacting hiring. Many economists expect higher rates and a lending slowdown by banks to further weigh on job growth and potentially cause a recession by the end of the year.

In March, the number of job openings fell to the lowest level in nearly two years, according to government data released Tuesday. Consumer spending is falling amid high prices and reduced access to credit.  

Still, Federal Reserve Chairman Jerome Powell said Wednesday that the U.S. could avoid a recession, citing “excess demand in the labor market.”

“Avoiding a recession is, in my view, more likely than having a recession,” Powell told reporters. “But I don’t rule that out either. It’s possible that we have a mild recession.”

Surprisingly strong jobs data, if it keeps up, could have major implications on the 2024 election. President Biden has consistently touted better-than-expected economic figures.

The April data also puts pressure on the Fed to keep interest rates elevated. Powell has said that he’s closing monitoring job and wage gains when considering how aggressively to fight inflation.

“Markets have been hoping for slower economic data, in the hope that it will give the Fed space to cut rates. Today’s jobs report has delivered the exact opposite,” Seema Shah, chief global strategist at Principal Asset Management, said in a research note.

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