The US labor market continues to return strongly after the pandemic: NPR


Pedestrians pass by the Now Hiring sign in Arlington, Va., March 16th.

Stephanie Reynolds / AFP via Getty Images


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Stephanie Reynolds / AFP via Getty Images


Pedestrians pass by the Now Hiring sign in Arlington, Va., March 16th.

Stephanie Reynolds / AFP via Getty Images

The American labor market is still hot.

Employers added 428,000 jobs in April, extending an extraordinary return to the job market. The unemployment rate has remained stable at 3.6% – the lowest level since the pandemic began.

The economy has now replaced nearly 95 percent of the jobs lost when the coronavirus hit.

And employers still want to hire. Job vacancies remain at or near historical highs as companies struggle to hire enough staff.

“For people who are out of work and looking, there are many job opportunities,” Federal Reserve Chairman Jerome Powell told reporters Wednesday.

“Wages are rising at rates not seen in a long time, so it’s a good time to be a worker and want to change jobs or get a salary increase on your current job,” he added.

The Fed’s cunning balance

Average hourly wages in April were 5.5% higher than a year ago. While wage increases are good for workers, they could have a potential downside for the economy.

Powell and his colleagues are worried that employers could offset the cost of higher wages by raising prices, adding inflation that is already the highest in 40 years.

The Federal Reserve has launched aggressive efforts to curb inflation, raising interest rates by half a percentage point on Wednesday and signaling that further rate increases are likely in June and July.


Federal Reserve Chairman Jerome Powell speaks during a news conference in Washington, DC, on May 4th.

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Jim Watson / AFP via Getty Images


Federal Reserve Chairman Jerome Powell speaks during a news conference in Washington, DC, on May 4th.

Jim Watson / AFP via Getty Images

The Fed hopes to gradually cool the boiling labor market without causing a big jump in unemployment. But investors worry the Fed’s actions will bring the economy into recession.

Deep uncertainty about the direction of the economy sparked one of the worst stock market sales since 2020 on Thursday, with the Dow Jones Industrial Average falling more than 1,000 points.

The labor market is showing signs of cooling

April was the 12th month in a row in which the economy created more than 400,000 jobs. Factories created 55,000 jobs, bars and restaurants 44,000, and the warehousing and transportation sector 52,000 jobs. Construction companies have created only 2,000 jobs – a significant slowdown from the previous two months, which could reflect the impact of rising mortgage rates on real estate.

Revised data show that employers added a total of 714,000 jobs in February and 428,000 jobs in March.

“Given that the job market has made such tremendous progress back towards 2019 levels, I think what we’ll see in the future is a more normal pace,” said Nela Richardson, chief economist for payroll processing company ADP.

In the twelve months before the pandemic, the U.S. was creating an average of 198,000 jobs a month.

A tight labor market could get extra breathing space if more people who were on the sidelines come into the workforce. But 363,000 fewer people were in the workforce in April than a month earlier.

While the overall unemployment rate remained unchanged in April, the rate for African Americans fell to 5.9% from 6.2% in March. Hispanic unemployment rate also fell to 4.1% from 4.2% a month earlier.

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