Economy added 253,000 jobs in April and unemployment fell to lowest in 54 years
Zachary Halaschak
Video Embed
The economy exceeded expectations in April and added 253,000 jobs, a sign that the labor market is holding up despite the Federal Reserve’s rate-hiking campaign and turmoil in the banking sector.
The headline job growth number in Friday’s employment report from the Bureau of Labor Statistics was higher than predicted and the unemployment rate fell to 3.4%, tied for the lowest such rate since 1969.
The stronger jobs report shows that rate hikes aren’t yet slowing economic activity and could cause the Fed to lean toward tightening monetary policy further.
“It continues to show that there is a stronger labor market than expected, notwithstanding the Fed’s moves,” Brian Marks, the executive director of the University of New Haven’s Entrepreneurship and Innovation Program, told the Washington Examiner.
Still, he said, overall averages of job growth are down the past few months as a sign of some softening.
The reading follows several months of strong job gains, which has been key positive economic data that President Joe Biden has touted even as historic inflation cuts deeply into the paychecks of people across the country. Recent jobs reports have proven surprisingly resilient, with the unemployment rate even declining to the lowest level since 1969 in January.
HOW FAR INFLATION HAS FALLEN SINCE ITS PEAK – AND HOW MUCH FURTHER IT HAS TO GO
Friday’s report, though, revised down the job gains for February and March by a combined 149,000, meaning that growth has not been as strong as previously though. Employment gains, while strong, are trending down.
Both the labor force participation rate (62.6%) and the employment-population ratio (60.4%) changed little from the month before. The measures are still below their pre-pandemic levels, though.
Notably in the report, black unemployment fell to a new record low of 4.7%.
Fears about the health of the economy have been elevated in recent weeks by the turmoil that has afflicted the banking sector, beginning with the collapse of Silicon Valley Bank and extending to other regional banks. Economists fear that banks could curtail lending, delivering a further hit to the economy. The “tighter credit conditions are likely to weigh on economic activity, hiring, and inflation,” Powell said at a press conference this week.
Although job growth proved surprisingly resilient through the first part of the year, there have been a few signs that the tide is turning. Jobless claims, a proxy for layoffs, have drifted up over the course of the year. The number of job openings, meanwhile, dropped below 9.6 million in March, the lowest level in about two years, according to the Bureau of Labor Statistics.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
This week the Fed once again raised interest rates by another quarter of a percentage point. The central bank’s key overnight rate is now 5% to 5.25% — the highest they have been since 2007, at the outset of the global financial crisis.
Most investors expect this week’s rate revision to be the last of the year and that by year’s end the central bank will begin cutting interest rates by as much as a full percentage point, according to futures contract prices for rates in the short-term market targeted by the Fed.