The U.S. economy added slightly more jobs than expected in April amid an increasingly tight labor market and despite soaring inflation and fears of slowing growth, the Bureau reported on Friday. of Labor Statistics.
Nonfarm payrolls rose 428,000 for the month, slightly above the Dow Jones estimate of 400,000. The unemployment rate was 3.6%, slightly above the estimate of 3, 5%. The April total was identical to the downwardly revised March tally.
There was also better news on the inflation front: the average hourly wage continued to grow, but at a level of 0.3% for the month, slightly below the estimate of 0.4 %. Year-over-year earnings rose 5.5%, about the same as March, but still below the pace of inflation.
Another measure of unemployment that includes discouraged workers and those in part-time jobs for economic reasons, sometimes referred to as the “real” unemployment rate, rose slightly to 7%. Black unemployment showed a steady decline and fell again to 5.9%, while Hispanic unemployment fell to 4.1%.
“The labor market continues to grow, supported by strong employer demand. After just over two years of the pandemic, the labor market remains resilient and on track to return to pre-pandemic levels this summer. “said Daniel Zhao, senior economist at job assessment site Glassdoor. “However, the labor market is showing signs of cooling as it turns the corner and the recovery enters a new phase.”
The participation rate, a key measure of worker engagement, fell 0.2 percentage points for the month to 62.2%, the first monthly decline since March 2021, as the labor force decreased by 363,000. The level is particularly large with a gap of about 5.6 million between job offers and available workers.
“Labour demand remains very strong; the problem is a shortage of available workers, and the drop in the labor force participation rate in April could add to wage pressures,” wrote the chief economist of the PNC, Gus Faucher.
Leisure and hospitality again led employment growth, adding 78,000 jobs. The unemployment rate for the sector, which has been hardest hit by the Covid pandemic, plunged to 4.8%, its lowest since September 2019 after peaking at 39.3% in April 2020. The average hourly wage of the sector increased by 0.6% over the month and is up 11% compared to a year ago.
Other big gainers include manufacturing (55,000), transportation and warehousing (52,000), professional and business services (41,000), financial activities (35,000) and healthcare (34,000). ). Retail trade also posted solid growth, adding 29,000 people, led by gains in food and beverage stores.
Some of the details in the report, however, weren’t as solid.
The household survey actually showed a drop of 353,000, leaving the level of 761,000 lower than in February 2020, just before the start of the pandemic. April marked the first monthly drop in the household survey since April 2020.
Equity futures fell as Wall Street digested the report and government bond yields were mostly higher.
The report is unlikely to do much to divert the Federal Reserve from its current path of raising interest rates. The central bank announced on Wednesday that it would raise its benchmark interest rate by half a percentage point in what will be an ongoing effort to stamp out price rises at their fastest pace in more than 40 years.
“Overall, with labor market conditions still strong – including very rapid wage growth – we doubt the Fed will abandon its hawkish plans given the current weakness in equities,” said Paul Ashworth, US Chief Economist at Capital Economics. .
The job growth comes with a U.S. economy experiencing its worst quarter of growth since the start of the pandemic and the production of workers for the first three months that fell 7.5%, the largest slowdown since 1947 and the second worst quarter on record. GDP was down 1.4% for the January to March period.