Labor Market Stays Hot Despite Fed’s Best Efforts

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Jason Cohen Contributor
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The U.S. added 253,000 jobs in April, significantly more than economists expected, as the unemployment rate ticked slightly down to 3.4%, according to Bureau of Labor Statistics (BLS) data released Friday, despite the Federal Reserve’s attempts to cool the labor market to bring down inflation.

Economists had anticipated the country would add 180,000 jobs compared to 236,000 in March, and that unemployment would jump from 3.5% to 3.6%, according to Reuters. Federal Reserve Chair Jerome Powell, who has been raising interest rates in an attempt to lower inflation, said Wednesday he thinks there is a chance the U.S. can avoid a recession in a press conference following the Federal Open Market Committee (FOMC) meeting, and the Fed’s decision to further hike rates by a quarter point.

At 3.4%, the unemployment rate changed little in April and remained in the range of 3.4%-3.7% since March 2022; growth was led by 43,000 jobs added in the professional and business sector, according to the BLS. Health care employment was also a major contributor to job growth, with 40,000 jobs added.

The number of unemployed people also barely changed in April at 5.7 million. However, the number of people who are not working and currently desire a job rose by 346,000 this month to 5.3 million.

The BLS data closely follows private payroll firm ADP’s surprisingly strong report, showing that jobs increased by an estimated 296,000 in April, led by a gain of 154,000 in the leisure and hospitality sector. (RELATED: ‘The US Economy Is Unwell’: Wall Street Bigwigs Pour Cold Water On Biden’s Economic Optimism)

“The labor market recession has not yet arrived,” E.J. Antoni, research fellow for Regional Economics at the Heritage Foundation’s Center for Data Analysis, told the Daily Caller News Foundation. “A plethora of survey data both from public sources, like regional federal reserve banks, and private sources show continued job growth.

“The data also are consistently showing deterioration in real wage growth,” Antoni added. “Consumers are getting desperate in the face of stubbornly high inflation and are taking any job they can to cover expenses.”

Leisure and hospitality jobs grew by 31,000, largely in food services and drinking places, according to the BLS. Employment in this sector is still 402,000 beneath its pre-pandemic February 2020 level.

“We remain committed to bringing inflation back down to our 2% goal and to keep our longer-term inflation expectations well-anchored,” Powell added. “Reducing inflation is likely to require a period of below-trend growth and some softening of labor market conditions.” 

The U.S. economy slowed more than anticipated to 1.1% in the first quarter of 2023, according to the Bureau of Economic Analysis (BEA).

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