U.S. added 428,000 jobs in April despite surging inflation

WASHINGTON

America’s employers added 428,000 jobs to their workforce in April. This extends a streak for solid hiring that has defied harsh inflation, chronic shortages of supply, and much higher borrowing cost.

Friday’s Labor Department report revealed that unemployment remained at 3.6% in the last month. This is the lowest level since half-century.

Despite the worst inflation in 40 years, the economy’s job gains have been remarkable consistent. Twelve consecutive months have seen employers add at least 400,000 new jobs. Continued wage growth and job growth in April will fuel consumer spending. The Federal Reserve is likely to continue raising borrowing rates sharply to lower inflation.

“With labor market conditions so strong and rapid wage growth, it is hard to believe that the Fed will change its hawkish views,” saidPaul Ashworth is the chief U.S. economist for Capital Economics.

There were some cautionary words in the latest employment statistics. The government revised its February and March estimates of job gains by 39,000. The government revised down its February and March estimates of job gains by a combined 39,000. Their departure slightly decreased the percentage of Americans either looking for work or working from 62.4% down to 62.2%.

Employers still offered raises last month, even though there are many workers shortages. Hourly wages rose by 0.3% from March to 5.5% from one year ago.

Last month saw widespread hiring across all industries. Factories added 55,000 new jobs, the highest number since July. Warehouses and transport companies added 52,000 jobs, restaurants and bars added 44,000, and health care 41,000. Finance 35,000, retail 29,000, and hotels 22,000. Only 2,000 construction companies were added, despite being hampered by supply and labour shortages.

However, it is not clear how long the boom in jobs will last. The Fed increased its key rate by half-percentage point this week — its most aggressive move since 2000 — signaling further substantial rate hikes. Consumers and businesses will find it more difficult to borrow, spend, and hire as the Fed increases their rates.

Additionally, the huge amount of economic assistance that the government had been providing to households has ended. Russia’s invasion and occupation of Ukraine have accelerated inflation and clouded our economic outlook. Many economists warn about a growing danger of recession.

The resilience of the labor market is striking in the current context of steep price increases and rising borrowing cost. The Labor Department has provided additional evidence this week that the market for jobs is still thriving. It found that just 1.38million Americans were receiving traditional unemployment benefits, the lowest level since 1970. And it saidEmployers had a record-breaking 11.5million job openings in March. However, layoffs remain well below pre-pandemic levels.

The economy has on average two jobs available for every person who is unemployed. This is the highest ever such ratio.

Yet another indicator that workers are enjoying extraordinary leverage in the labor market is the record breaking 4.5million people who quit their jobs in March. They were clearly confident that they would find a better job elsewhere.

The nation still has 1.2 million fewer jobs than it had in February 2020, right before the pandemic.

The highest inflation rate in 40-years has been caused by chronic shortages of supplies, goods and workers. The financial situation was dramatically impacted by Russia’s invasion in February of Ukraine. This pushed global oil and gas prices up and severely clouded the national and international economic picture.

Many industries are experiencing labor shortages and companies have increased wages to attract new workers and keep their employees. However, the rise in consumer prices has not slowed down pay increases.

The Fed, which was most economists believe was too slow to recognize the threat of inflation, is raising rates aggressively. It has a difficult goal: a soft landing.