Economy adds better than expected 428K jobs in April, unemployment holds at 3.6 percent
The U.S. economy added 428,000 jobs and the jobless rate held even at 3.6 percent, according to data released Friday by the Labor Department.
The April jobs report showed job growth holding strong in April as the unemployment rate remained just 0.1 percentage points above its level in February 2020. Economists expected the U.S. to have added roughly 300,000 jobs, according to consensus estimates, while bringing the jobless rate back down to pre-pandemic lows.
Despite rising inflation, high gas prices and a first-quarter decline in economic growth, consumer and business spending have continued to grow — even when adjusted for inflation.
That resilience has fueled historic demand for workers and rapid wage growth for low- and middle-income households. With two open jobs for each unemployed American, businesses have been scrambling to add workers and meet overwhelming consumer demand.
“The job market continues to plow forward, buoyed by strong employer demand. After just over two years of the pandemic, the job market is remaining resilient and on track for a return to pre-pandemic levels this summer,” said Daniel Zhao, senior economist at Glassdoor, in a Friday analysis.
The leisure and hospitality industry added 78,000 jobs, leading all other sectors on the month, with a gain of 44,000 jobs at restaurants and bars and 22,000 at accommodation businesses such as hotels and resorts. The sector was the hardest hit by the pandemic and remains down 1.2 million jobs from February 2020.
Manufacturing added a strong 55,000 jobs last month, coming to within 56,000 jobs of its pre-pandemic employment level. Transportation and warehousing also added 52,000 jobs as suppliers race to keep up with consumer demand amid global shortages, backlogs and delays driven by pandemic shutdowns abroad.
The financial service sector gained 35,000 jobs, health care employment rose by 34,000 jobs and retailers gained 29,000 jobs as strong job growth at grocery stores and general merchandise stores washed out a decline in home and garden store employment and personal care store jobs.
“Increased foot traffic in downtown areas is reviving downtown cafes and retail stores, increasing demand for rideshare drivers, and increasing activity at local gyms and entertainment businesses,” said Julia Pollak, chief economist at ZipRecruiter, in a Friday analysis.
The strong April jobs gain comes as President Biden and Democrats face increasing backlash from voters over high inflation. Though the U.S. has gained more than 2 million jobs over the first four months of 2022, consumer prices were up 7.9 percent over the past year in March, according to Labor Department data.
The U.S. has recovered all but 1.2 million of the 21 million jobs lost during the onset of the coronavirus pandemic in 2020. But the speed of the country’s economic rebound and high demand for labor are among forces behind the highest annual inflation in more than four decades.
The Federal Reserve started in March a series of interest rate hikes meant to cool the economy enough to lower inflation without stopping job gains or economic growth. Consumer and business spending tends to slow down as borrowing costs rise, which often leads to fewer job gains.
Fed Chairman Jerome Powell said Wednesday the overwhelming amount of open, unfilled jobs could shield the economy from a decline in actual employment. He also suggested rising interest rates could pull more workers back into the job hunt with the size of the U.S. workforce still below pre-pandemic levels.
Labor force participation ticked down slightly in March, falling 0.2 percentage points to 62.2 percent. The employment-population ratio, which measures what percentage of U.S. working-age adults are either employed or seeking a job, also fell slightly to 60 percent. Wage growth remained high, but fell from a 5.6 percent annual increase to 5.5 percent in April.
“Despite some indicators of cooling in April like the declining labor force participation rate and slowing wage growth, the job market is still nearing key recovery milestones as the unemployment rate reaches pre-pandemic levels and payroll employment is on track for a full recovery this summer,” Zhao said.
While the labor market remains sturdy, a growing number of economists and policymakers fear the Fed may be forced to raise interest rates high enough to induce a recession. Higher interest rates tamp down on consumer demand, but will do little to ease the pressure on prices caused by the war in Ukraine, COVID-19–related shutdowns in China and the ripple effects of port backlogs, supply shortages and other snarls.
“Overall, the picture moving forward is of a job market cooling down, but today’s jobs report gives more confidence that the recovery is resilient going into that slowdown,” Zhao said.
Updated at 9:34 a.m.