April jobs report: a 428,000 gain shows a buoyant job market

April produced another solid month of employment growth, the Labor Department reported Friday, reflecting the resilient recovery of the economy since the devastation of the pandemic.

U.S. employers added 428,000 jobs, the department said, the same figure revised as of March. The unemployment rate remained at 3.6 percent in April.

“The job market is proving to be a key source of resilience for the economy. Job creation will eventually stabilize at a slower pace as businesses suffer from rising inflation and tighter financial conditions, but earnings will remain healthy, “said Oren Klachkin, a leading US economist at Oxford. Economics. “We think the economy has enough strength to create over 4 million jobs this year.”

The US economy regained nearly 95% of the 22 million jobs lost at the height of the coronavirus-related lockdowns in the spring of 2020. And labor force participation recovered faster than most analysts expected. initially, approaching prepandemic levels. The job supply over the past year hasn’t kept pace with a record wave of job openings, however, as businesses expand to meet the demand for a variety of goods and services.

This helped drive up wages – the April survey showed an average hourly wage of 5.5% higher than the previous year – but these earnings for workers were largely offset by higher prices.

The high inflation began last spring when the demand from households and businesses collided with a chaotic reordering of the supply of goods and jobs, and lasted longer than the Federal Reserve had predicted. Price pressures were exacerbated by the war in Ukraine, which disrupted energy and commodity markets, and by another period of coronavirus lockdown in China, which caused new supply chain disruptions.

As a result, the central bank decided to raise interest rates in an effort to cool consumer spending, business lending and demand for workers. If borrowing costs hit what officials call “tight levels,” a recession and a reversal in job gains could follow.

A number of analysts believe that rising corporate costs and labor supply woes could still cause a rapid increase in the pace of employment: Goldman Sachs chief economist Jan Hatzius recently predicted that monthly wage growth would fall. will mitigate to 200,000 jobs in the coming months and continue to decelerate.