WASHINGTON (AP) – US employers added 428,000 jobs in April, extending a streak of solid hiring that has punished inflation, chronic supply shortages, the Russian war on Ukraine and much higher borrowing costs. .
Friday’s jobs report from the Labor Department showed that last month’s hiring put the unemployment rate at 3.6 percent, well above the lowest level in half a century.
Hiring the economy has been remarkably consistent to withstand the worst inflation in four decades. Employers have added at least 400,000 jobs for 12 consecutive months.
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Yet it is not clear how long the jobs boom will continue. The Federal Reserve this week raised its key rate by half a percentage point — its most aggressive move since 2000 — and signaled major rate hikes to come. As the Fed’s rate hikes take effect, they will make it more expensive for consumers and businesses to borrow, spend, and rent.
In addition, the huge financial assistance supplied by the government to the households has come to an end. And Russia’s invasion of Ukraine has helped accelerate inflation and tarnished the economic outlook. Some economists have warned of an increased risk of recession.
For now, the resilience of the job market is particularly striking when set against a backdrop of galloping price increases and rising borrowing costs. This week, the Labor Department provided further evidence that the job market is still booming. It reported that only 1.38 million Americans were collecting traditional unemployment benefits, the lowest since 1970. And it said employers posted a record-high 11.5 million job openings in March and that layoffs remained well below pre-pandemic levels.
In addition, the economy now has two jobs available for every unemployed person on average. This is the highest such ratio on record.
And in another sign that workers are finding unusual gains in the job market, a record 4.5 million people left their jobs in March, apparently showing they could find better opportunities elsewhere.
Persistent shortages of goods, supplies and workers have contributed to the rise in prices – the highest inflation rate in 40 years. Russia’s invasion of Ukraine in late February dramatically eroded the financial landscape, sending global oil and gas prices skyrocketing and severely tarnishing the national and global economic picture.
Meanwhile, with a slowdown in many industries due to labor shortages, companies are raising salaries to attract job applicants and try to retain their existing employees. Yet, wage increases have not kept pace with the rise in consumer prices.
This is why the Fed, which most economists say was too slow to recognize the threat of inflation, is now aggressively raising rates. Its goal is extremely difficult: the so-called soft landing.