US job growth solid in April as unemployment rate remains steady

Economy added 428,000 jobs last month, Labour Department says

The US had a record 11.5 million job openings on the last day of March. AP

US job growth increased more than expected in April, underscoring the economy's strong fundamentals despite a contraction in gross domestic product in the first quarter.

Payrolls rose by 428,000 jobs last month, the Labour Department said in its closely watched employment report on Friday.

Data for March was revised slightly lower to show 428,000 jobs had been added, instead of 431,000 as previously reported.

Economists polled by Reuters had forecast that payrolls would rise by 391,000 jobs.

Estimates ranged from as low as 188,000 to as high as 517,000. The unemployment rate was unchanged at 3.6 per cent.

“It is ambiguous whether larger employment gains would be a cause for concern for the Fed or a source of relief,” said Lou Crandall, chief economist with Wrightson ICAP in Jersey City, New Jersey.

“Stronger growth that reflects a willingness by individuals to return to the workforce would tend to dampen labour costs, while growth induced by higher wage offers by employers pinched by labour shortages would have the opposite effect.”

The US Federal Reserve is trying to tighten monetary policy to bring down inflation without tipping the economy into a recession.

The Fed raised its policy interest rate by half a percentage point on Wednesday, the biggest increase in 22 years, and said it would begin to trim its bond holdings next month.

It started raising rates in March. Fed Chairman Jerome Powell told reporters that “the labour market is extremely tight, and inflation is much too high”.

Last month's job gains underscored the economy's strong fundamentals despite output shrinking in the first quarter under the weight of a record trade deficit.

There were a record 11.5 million job openings on the last day of March, which widened the jobs-workers gap to a high of 3.4 per cent of the labour force, from 3.1 per cent in February.

Average hourly earnings increased by 0.3 per cent after advancing 0.5 per cent in March. That lowered the yearly increase in wages to a still-robust 5.5 per cent, from 5.6 per cent in March.

Compensation for American workers logged its largest increase in more than three decades in the first quarter, helping to keep domestic demand supported.

Although Mr Powell said on Wednesday that a 75 basis points rate increase was not on the table, some economists believe the Fed could raise its benchmark interest rate above its neutral rate, estimated between 2 per cent to 3 per cent.

Updated: May 06, 2022, 1:25 PM
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