The US economy added 428,000 jobs in April, unemployment at 3.6%, but the participation rate fell

The US economy added 428,000 jobs in April and the unemployment rate remained stable in 3.6 percent, the Labor Department said Friday.

Economists had expected the economy to add 400,000 jobs and the jobless rate to remain unchanged from the previous month at 3.6 percent. The range of forecasts from economists surveyed by Econoday was between a profit of 300,000 to a profit of 500,000.

The labor force participation rate unexpectedly dropped to 62.2 percent from 62.4 percent.

Average hourly earnings for all employees on private nonfarm payrolls rose 10 cents, or 0.3 percent, to $31.85 in April. Over the last 12 months, average hourly earnings increased 5.5 percent. In April, average hourly earnings for private-sector production and non-supervisory employees increased 10 cents, or 0.4 percent, to $27.12. This represents a slowdown in wage gains from 0.4 percent overall in March, likely because many of the jobs added in April are at the lower end of the pay scale.

The economy added jobs at a breakneck pace in the first three months of the year despite the economy contracting 1.4 percent. Employers added nearly 1.7 million new workers in the first quarter, an average of 562,000 a month. At the end of March, there were a record 11.5 million job openings and a record 4.5 million workers who voluntarily left their jobs, usually a sign that they hope to easily find better-paying work elsewhere.

February and March jobs figures were revised down. After revisions, employment in February and March combined was 39,000 lower than previously reported.

The US economy recovered from the pandemic much faster than expected and faster than economies around the world. The labor market, in particular, quickly recovered much of the damage caused by the 2020 shutdowns and social distancing, and the unemployment rate fell much faster than expected. Demand for goods soared as US incomes surged with stimulus money from various government programs and social distancing rules cut people off from many leisure service activities (sports, concerts, travel, movies) that would normally have depleted bank accounts.

The supply side of the economy was unable to keep pace with the shift towards spending on goods, especially with many exporting countries also battling the pandemic. China’s ports have suffered a series of closures under the country’s zero-tolerance policy for Covid. Various stages of the global supply chain for building semiconductors have also broken down, creating shortages that have forced makers of everything from cars to appliances to phones to cut production.

Thanks to unusual trade imbalances, shipping containers were in short supply in some places, while containers were empty in others. But even when that was resolved, US ports around Los Angeles were overwhelmed with ship arrivals, forcing long delays. American businesses, fearful of holiday shortages, scrambled to stock shelves and warehouses early and warned consumers to shop early. US households heeded this advice and made big purchases in October and early November, encouraging retailers to expect even more purchases than usual during the traditional post-holiday shopping season. As it turned out, the initial surge in purchases was followed by a pullback, leaving wholesalers and retailers with undesirable inventory levels.

In the first few months of this year, some of the port congestion cleared up and imports rose to record levels. At the same time, companies slowly built up inventories as they cut back on accidental build-up during the 2021 holiday season. This combination of rising imports and lower inventories was responsible for the drop in GDP in the first quarter.

Meanwhile, inflation has taken over the US economy. Despite signs that the demand side of the economy had recovered and the supply side was under pressure, the Federal Reserve continued to keep rates low, fearful of repeating the mistakes of the past of withdrawing economic support too much. early. Similarly, the Biden Administration and Democrats led by House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer (D-NY) pushed through a huge program expense plan called the American Rescue Plan.

The result: a burst of inflation that policymakers at the Fed and the Biden administration initially insisted would be transitory. But as supply chains remained stressed and prices continued to rise last year, Fed officials dropped the word transitional and scrambled to adopt an inflation-fighting stance. At the end of the year, inflation was at 7 percent, the highest in almost 40 years. In the first months of this year, inflation continued to rise, reaching 8.5 percent in March.

Seeking to control inflation, Federal Reserve Chairman Jerome Powell and his fellow Fed officials raised interest rates by a quarter point at their March meeting and by a half point at the next meeting in May. They have signaled that they will raise their target interest rate by at least half a percentage point in the next two meetings and expect quarter-point increases after that. At a press conference last

Leave a Comment