By PAUL WISEMAN
WASHINGTON (AP) — U.S. employers added 428,000 jobs in April, extending a streak of strong hiring that has defied punitive inflation, chronic supply shortages, Russia’s war on Ukraine and much higher borrowing costs.
Friday’s jobs report from the Labor Department showed hiring last month kept the unemployment rate at 3.6%, just above the lowest level in half a century.
The economy’s hiring gains have been surprisingly consistent in the face of the worst inflation in four decades. Employers have added at least 400,000 jobs for 12 consecutive months.
At the same time, job growth in April, coupled with steady wage gains, will help boost consumer spending and likely keep the Federal Reserve on track to sharply raise interest rates to try to curb inflation. Early trading in the stock market on Friday reflected concerns that a strong labor market will keep wages and inflation high and lead to rising borrowing costs for consumers and businesses. Higher loan rates could, in turn, reduce corporate profits.
“With labor market conditions still so strong, including very rapid wage growth, we doubt the Fed will abandon its aggressive plans,” said Paul Ashworth, chief US economist at Capital Economics.
The latest employment figures contained some cautionary notes about the labor market. The government revised down its job creation estimate for February and March by a combined 39,000 jobs. And the number of people in the workforce fell in April by 363,000, the first drop since September. His departure slightly reduced the proportion of Americans who are working or looking for work from 62.4% to 62.2%.
Still, at a time when worker shortages have left many companies desperate to hire, employers continued to hand out wage increases last month. Hourly wages increased 0.3% from March and 5.5% from a year ago.
Across all industries last month, hiring was widespread. Factories added 55,000 jobs, the most since last July. Warehouses and transport companies added 52,000, restaurants and bars 44,000, health care 41,000, finance 35,000, retailers 29,000 and hotels 22,000. Construction companies, which have been held back by labor and supply shortages, added just 2,000.
However, it is not clear how long the employment boom will continue. This week, the Fed raised its key rate by half a percentage point, its most aggressive move since 2000, signaling that more major rate hikes are on the way. As the Fed’s rate hikes take effect, they will make spending and hiring increasingly expensive.
In addition, the substantial economic aid that the government had been giving to households has expired. And the Russian invasion of Ukraine helped accelerate inflation and clouded the economic outlook. Some economists warn of a growing risk of recession.
For now, the resilience of the labor market is particularly striking when set against the backdrop of skyrocketing price increases and rising borrowing costs. This week, the Department of Labor provided more evidence that the job market is still booming. It reported that only 1.38 million Americans were collecting traditional unemployment benefits, the fewest since 1970. And it said that employers posted a record 11.5 million job openings in March and that layoffs remained well below from pre-pandemic levels.
Additionally, the economy now has, on average, two jobs available for every unemployed person. That is the highest ratio on record.
And in yet another sign that workers enjoy unusual leverage in the labor market, a record 4.5 million people quit their jobs in March, evidently confident they could find a better opportunity elsewhere.
Still, the nation is still 1.2 million jobs short of the number it had in February 2020, just before the pandemic wrecked the economy.
Chronic shortages of goods, supplies and workers have contributed to skyrocketing prices, the highest rate of inflation in 40 years. The Russian invasion of Ukraine in late February dramatically worsened the financial picture, driving up global oil and gas prices and severely clouding the national and global economic outlook.
Meanwhile, with many industries slowing down due to labor shortages, companies have been raising wages to try to attract job seekers and retain their existing employees. Still, wage increases have not kept pace with rising consumer prices.
That’s why the Fed, which most economists say was too slow to recognize the inflation threat, is now raising rates aggressively. His goal is notoriously difficult: the so-called soft landing.