The April jobs report showed the labor market remains robust, with more than a quarter million new jobs added to the economy last month as the unemployment rate fell to match its lowest level since May 1969. Indeed the U.S. economy added 253,000 non-farm payroll jobs last month, with the unemployment rate unexpectedly dropping to 3.4%, according to the data from the U.S. Bureau of Labor Statistics.
Monthly job Creation
Source: U.S. Bureau of labor Statistics
Economists had expected the report to show non-farm payrolls rose by 185,000 last month while the unemployment rate was forecast to rise to 3.6%. Friday’s jobs report also showed wage growth remained stronger than forecast in April, with wages rising 4.4% over the prior year, an acceleration from the gains seen in March. Employment gains in March, however, were revised lower to show 165,000 jobs were created during the month, 71,000 fewer than previously reported. February’s job gains were also revised lower—to 248,000 from 326,000—making job growth over that two-month stretch lower than previously reported by 149,000.
In recent months, more Americans have joined the workforce, helping to ease labor force shortages. The labor force participation—or the share of workers employed or looking for work—held at 62.6% in April. Moreover, average hourly earnings, a measure of wage growth, rose to 0.5% in March. Professional and business services led to job gains with an increase of 43,000. That was followed by healthcare (40,000), leisure and hospitality (31,000), and social assistance (25,000). Despite serious baking industry troubles, jobs in finance increased by 23,000. Government hiring rose by 23,000.
The unemployment rate tied at a record low going back to May 1969. The jobless level for blacks fell to a fresh record 4.7% and declined to 4.4% for Hispanics while holding at 2.8% for Asians. The rate for adult women was unchanged at 3.1%. Friday’s report comes amid persistent troubles in the banking industry, particularly midsize regional institutions that have been hit by runs on deposits and worried investors who have sent share prices tumbling.
Where does this leave the Federal Reserve? The Federal Reserve has been concerned about an out-of-balance labor market that it fears could stoke inflation that’s already running high. The central bank is striving to get inflation down to a 2% annual level, though it is well above that now. Rising wages have helped pressure prices. Jerome Powell said a 3% annual wage gain is probably consistent with the Fed’s 2%.