Against the odds, even more jobs
Run of solid gains continues despite stronger headwinds
America’s employers added 428,000 jobs in April, extending a streak of solid hiring that has defied punishing inflation, chronic supply shortages, the Russian war against Ukraine and much higher borrowing costs.
Friday’s jobs report from the Labor Department showed that last month’s hiring kept the unemployment rate at 3.6%, just above the lowest level in a half-century.
The economy’s hiring gains have been strikingly consistent in the face of the worst inflation in four decades. Employers have added at least 400,000 jobs for 12 straight months.
At the same time, the April job growth, along with steady wage gains, will fuel consumer spending and likely keep the Federal Reserve on track to raise borrowing rates sharply to fight inflation. The U.S. stock market slumped again Friday on concern that the strength of the job market will keep wages and inflation high and lead to increasingly heavy borrowing costs for consumers and businesses. Higher loan rates could, in turn, weigh down corporate profits.
“With labor market conditions still this strong — including very rapid wage growth — we doubt that the Fed is going to abandon its hawkish plans,” said Paul Ashworth, chief U.S. economist at Capital Economics.
The latest employment figures did contain a few cautionary notes about the job market. The government revised down its estimate of job gains for February and March by a combined 39,000.
And the number of people in the labor force declined in April by 363,000, the first drop since September. Their exit slightly reduced the proportion of Americans who are either working or looking for work from 62.4% to 62.2%. Many industries have been slowed by labor shortages. The nation remains 1.2 million jobs shy of the number it had in early 2020, just before the pandemic hammered the economy. “We need those people back,’ said Beth Ann Bovino, chief U.S. economist at S&P Global.
Bovino noted that some Americans are remaining on the sidelines of the workforce out of lingering concerns about COVID-19 or because of difficulty finding affordable daycare for unvaccinated children.
In the meantime, employers keep handing out pay raises. Hourly wages rose 0.3% from March to April and 5.5% from a year ago. Prices, though, are rising faster than pay is.