Editor TLN
Economists polled by Reuters had forecast payrolls to rise by 180,000. Payrolls are well above the monthly increase of 70,000-100,000 needed to keep up with the growth of the working-age population.
The unemployment rate fell to 3.4% from 3.5% in March.
Average hourly earnings rose 0.5% after advancing 0.3% in March. Wages increased 4.4% year-on-year in April after climbing 4.3% in March.
Other measures, such as the employment cost index and the Atlanta Fed wage tracker, are also showing momentum. Wage growth remains too strong to be consistent with the Federal Reserve’s 2% inflation target.
The Fed raised its benchmark overnight interest rate by another 25 basis points to the 5%-5.25% range on Wednesday, signaling it may pause the US central bank’s faster tightening campaign. since the 1980s, although it maintained an aggressive bias.
The Fed has raised its policy rate by 500 basis points since March 2022.
Some economists, however, believe the labor market is overstating the health of the economy, pointing to the divergence between consumer spending and job creation, as well as a continued decline in worker productivity.
Consumer spending stagnated in February and March. Productivity has declined year on year for five consecutive quarters, the longest period since the government began tracking the series in 1948.
Economists also noted that job growth was becoming more concentrated in the leisure and hospitality industry, as well as state and local governments, sectors where employment remains below pre-pandemic levels.
With recession risks rising due to borrowing costs and tighter credit conditions amid financial market stress, the hiring landscape could change quickly.
For now, the general consensus is that the economy will continue to create jobs at least until the fourth quarter.
