The labor market still defies gravity.
Employers added 253,000 jobs in April, the Labor Department reported Friday, reversing a cooling trend that marked the first quarter and was expected to continue.
The unemployment rate was 3.4 percent, down from 3.5 percent in March and matching January’s level, the lowest since 1969.
Bigger-than-forecast job gains complicate the Federal Reserve’s potential shift toward a pause in interest rate hikes. On Wednesday, President Jerome H. Powell said the Fed could continue to raise rates if new data show the economy is not slowing enough to cut rates.
“Every time we forecast some employment growth, the labor market has beaten expectations,” said Mervyn Jebaraj, director of the University of Arkansas’ Center for Business and Economic Research.
Downward revisions to the previous two months changed the spring employment picture meaningfully, subtracting a total of 149,000 jobs. That means April’s number is lower than the average of 290,000 jobs added over the past six months, but an acceleration again from the 165,000 jobs added in March.
Job growth is broad-based across the economy, even if it slows from the eye-popping numbers of 2022. Leisure and hospitality added 31,000 jobs, down from an average of 73,000 over the past six months, another step down from its highs in early 2020.
Since early 2021, the labor market has been unusually tight, as employers have struggled to adapt to sudden mass layoffs and large shifts in demand for goods and services. The unemployment rate reached its lowest level since the 1960s. Wages at the low end of the wage scale rose faster than they had in decades.
All of these benefited historically disadvantaged groups in the labor market. The unemployment rate for black Americans hit 4.7 percent in April, the lowest level in the gap between white and black unemployment rates. The smallest ever measured.The share of working-age people participating in the labor market reached 83.3 percent, the highest level since 2008.
In recent months, the exceptional mismatch between supply and demand for labor has come to a balance. Job openings, which were nearly double the number of available workers, fell in the first quarter. The rebound in immigration has reduced labor shortages, particularly in sectors such as leisure and hospitality and health care, allowing them to continue to grow rapidly.
“One of the clearest effects we’ve seen from the increased flows of work visas is a loosening of supply constraints and an increase in participation,” said Courtney Schubert, an economist at the consultancy Macro Policy Perspectives. Jobs filled by immigrants may continue to be employed in the summer months, as seasonal workers are hired at parks and resorts, she said.
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