The U.S. labor market extended a historic run of rapid job growth last month despite a gloomy economic outlook, as employers rushed to serve waves of consumers who are shopping, dining out and traveling more.
The economy added 428,000 jobs in April, duplicating March’s increase and marking the 12th straight month of gains above 400,000, the Labor Department said Friday. The unemployment rate remained at 3.6%, just a shade above the prepandemic level of 3.5%, a half-century low.
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Restaurants, hotels and other leisure and hospitality industries led the way in hiring last month, though factories, warehouses and white-collar companies all posted strong job gains. Wage growth cooled a bit but remained robust, with workers’ average hourly earnings up 5.5% over the past year though not enough to keep up with inflation.
Friday’s report included a puzzling decline in the labor force—the first since September—as 363,000 people retreated to the sidelines, shrinking what was already a tight labor pool.
Investors, bracing for further interest-rate increases as the Federal Reserve tries to cool the economy and bring down inflation, extended on Friday one of Wall Street’s worst selloffs since the pandemic began. U.S. stocks fell after the jobs figures were released but pared back losses later in the day. U.S. Treasury yields bounced around in choppy trading.
“No doubt, amid all of the sea of negative news, the labor market continues to be the bright and shining star—for now,” said
chief U.S. economist at Oxford Economics. “Domestic demand in the U.S. still remains resilient. We’re short of workers and we’re short of inventories. That’s going to help propel demand for workers.”
The combination of aggressive hiring and low unemployment will likely embolden the Fed as it shifts its focus from pushing down unemployment to tamping down high inflation. The Fed this week raised its benchmark interest rate by the most since 2000 and plans additional increases in 2022 to rein in the highest inflation in 40 years while aiming to keep job growth steady.
Former U.S. Treasury Secretary
in a Wall Street Journal interview Friday, raised doubts about the Fed’s ability to cool the economy without causing a downturn. “It’s definitely odds-off that we will have a soft landing,” he said. Mr. Summers added that the risks for the economy are just quite substantial and that…
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