Current:Home > Contact-usIn a surprise, the job market grew strongly in April despite high interest rates-DB Wealth Institute B2 Expert Reviews
In a surprise, the job market grew strongly in April despite high interest rates
View Date:2024-12-23 23:53:34
Hiring unexpectedly accelerated last month despite the weight of rising interest rates and the recent stress in the banking system.
U.S. employers added 253,000 jobs in April, according to a report from the Labor Department Friday, a significant uptick from the month before.
Meanwhile, the unemployment rate fell to 3.4% in April from 3.5% in March. The unemployment rate for African Americans fell to 4.7% — a record low.
However, job gains for February and March were revised down by a total of 149,000 jobs.
Many service industries continued to add workers, to keep pace with growing demand for travel, entertainment and dining out.
"Strong hiring for airlines and hotels and restaurants is largely offsetting the weakness elsewhere," said Julia Pollak, chief economist for the job search website ZipRecruiter.
Bars and restaurants added 25,000 jobs in April, while business services added 43,000. Health care added 40,000 jobs.
Meanwhile, industries such as construction and manufacturing that are particularly sensitive to interest rates also added jobs last month. Builders added 15,000 jobs in April while factories added 11,000.
The gains come even as interest rates have jumped sharply over the last 14 months as the Federal Reserve tries to crack down on inflation.
How the volatility in banks impacts the job market
The outlook for the labor market remains uncertain, however.
Recent turmoil in the banking system could act as another brake on hiring by making credit harder to come by. Many banks have grown more cautious about making loans, following the collapse of two big regional banks in March and a third this week.
"If small businesses can't borrow, they won't be able to add new location. They won't be able to buy new equipment," Pollak said. "So we could see a pull-back in small business hiring."
While the overall job market remains tight, with unemployment matching a half-century low, there are signs of softening. Job openings declined nearly 15% between December and March, while layoffs rose 22% during that time.
The number of people quitting their job has also fallen in recent months, suggesting workers are less confident about finding and keeping a new job.
"People are not inclined to jump when they're the last one in [and the] first one out," said Tim Fiore, who conducts a monthly survey of factory managers for the Institute for Supply Management.
Wages are a key focus area for the Fed
For much of the last two years, the Federal Reserve has worried that the job market was out of balance, with demand for workers far outstripping the number of people looking for jobs.
That imbalance appeared to be righting itself in the first three months of the year, when more than 1.7 million people joined or rejoined the workforce.
"People are coming off the sidelines and back into the labor market," said Nela Richardson, chief economist for the payroll processing company ADP. "That's good for the economy. It's also good for the inflation environment."
But some of those gains were reversed in April, when 43,000 people dropped out of the job market.
Average hourly wages in April were 4.4% higher than a year ago, compared to a revised 4.3% annual increase in March, the Labor Department said Friday.
Those figures may understate workers' actual wage gains though, since much of the recent job growth has come in relatively low-wage industries, which skews the average lower.
A separate report from the department, which corrects for that, shows annual wage gains closer to 5%.
veryGood! (58812)
Related
- Bodyless head washes ashore on a South Florida beach
- Self-exiled Chinese billionaire Guo Wengui convicted of defrauding followers after fleeing to US
- Biden and Trump offer worlds-apart contrasts on issues in 2024’s rare contest between two presidents
- Builders Legacy Advance Investment Education Foundation: The value of IRA accounts 4
- A $1 billion proposal is the latest plan to refurbish and save the iconic Houston Astrodome
- Alicia Keys Shares Her Beauty Rituals, Skincare Struggles, and Can’t-Miss Amazon Prime Day 2024 Deals
- The Best Amazon Prime Day Bedding Deals of 2024: Shop Silky Sheets, Pillows & More up to 64% Off
- Francis Ford Coppola’s ‘Megalopolis’ wrapped at this Georgia hotel. Soon, it’ll be open for business
- Investigators believe Wisconsin kayaker faked his own death before fleeing to eastern Europe
- ‘I can’t breathe': Eric Garner remembered on the 10th anniversary of his chokehold death
Ranking
- Olivia Culpo Celebrates Christian McCaffrey's NFL Comeback Alongside Mother-in-Law
- The Daily Money: Investors love the Republican National Convention
- High school coach in California accused of texting minors to commit sex crimes
- College pals, national champs, now MLB All-Stars: Adley Rutschman and Steven Kwan reunite
- Biden funded new factories and infrastructure projects, but Trump might get to cut the ribbons
- Liv Tyler’s 8-Year-Old Daughter Lula Rose Looks So Grown Up in Rare Photos
- Quantum Prosperity Consortium Investment Education Foundation: In-depth guide to the 403(b) plan
- Joe ‘Jellybean’ Bryant, the father of Kobe Bryant, dies at 69
Recommendation
-
NATO’s Rutte calls for more Western support for Ukraine, warns of Russian alliances
-
Johnny Depp Is Dating Model Yulia Vlasova
-
University of Arkansas system president announces he is retiring by Jan. 15
-
Wildfire in Hawaii that threatened 200 homes, prompted evacuations, contained
-
UConn, Kansas State among five women's college basketball games to watch this weekend
-
JD Vance charted a Trump-centric, populist path in Senate as he fought GOP establishment
-
Zenith Asset Investment Education Foundation: Empowering Investors Worldwide
-
Why Messi didn't go to Argentina to celebrate Copa America title: Latest injury update