The job market still defies gravity.
Employers added 253,000 jobs in April, the Labor Department reported Friday, in a reversal of the cooling trend that had characterized the first quarter and is expected to continue.
The unemployment rate stood at 3.4 percent, up from 3.5 percent in March, and matched the January level, the lowest since 1969.
Higher-than-expected job growth complicates the Federal Reserve’s possible shift to a pause in rate hikes. Chairman Jerome H. Powell said Wednesday that the central bank could continue to raise rates if new data shows the economy is not slowing enough to keep prices down.
It is also an indication that the failure of three banks and the ensuing withdrawal of lending, which is expected to hit smaller companies in particular, has not yet put a brake on job creation.
“All of these things tell us it’s not a hard stop; it creates headwinds, but not debilitating headwinds,” said Carl Riccadonna, chief US economist at BNP Paribas. “There is a gradual downturn going on, but it’s definitely stubborn and persistent in the trend.”
Downgrades from the previous two months significantly changed the employment picture in the spring, subtracting a total of 149,000 jobs. That brings the three-month average to 222,000 jobs, a marked slowdown from the 400,000 average jobs added in 2022.
Since early 2021, the labor market has been unusually tight as employers struggled to reverse a sudden mass layoff and deal with massive shifts in demand for goods and services. Unemployment reached its lowest point since the 1960s. Wages at the lower end of the pay scale rose faster than in decades.
All of this benefits groups that have historically been at a disadvantage in the labor market. The unemployment rate for black Americans reached an all-time low of 4.7 percent in April, and the gap between white and black unemployment rates was also the narrowest on record. The proportion of people of working age participating in the labor market reached 83.3 percent, a level not seen since 2008.
This exceptional mismatch between supply and demand of labor has become increasingly balanced in recent months. The number of vacancies, which had almost doubled the number of available employees, plummeted in the first quarter. And an uptick in immigration eased labor shortages, especially in areas such as leisure and hospitality and health care, allowing them to continue to grow rapidly.
“I think one of the clearest implications we’ve seen from the increased flow of work visas is the easing of supply restrictions and the increase in participation,” said Courtney Shupert, an economist with the consulting firm MacroPolicy Perspectives. Immigrant-filled jobs may continue to boost employment in the summer months, she said, as seasonal workers are hired at parks and resorts.
