The U.S. economy added slightly more jobs than expected in April amid an increasingly tight labor market and despite surging inflation and fears of a growth slowdown, the Bureau of Labor Statistics reported Friday.
Nonfarm payrolls grew by 428,000 for the month, a bit above the Dow Jones estimate of 400,000. The unemployment rate was 3.6%, slightly higher than the estimate for 3.5%. The April total was identical to the downwardly revised count for March.
There also was some better news on the inflation front: Average hourly earnings continued to grow, but at a 0.3% level for the month that was a bit below the 0.4% estimate. On a year-over-year basis, earnings were up 5.5%, about the same as in March but still below the pace of inflation.
An alternative measure of unemployment that includes discouraged workers and those holding part-time jobs for economic reasons, sometimes referred to as the “real” unemployment rate, edged higher to 7%.
The labor force participation rate, a key measure of worker engagement, fell 0.2 percentage points for the month to 62.2%, tied for the lowest of the year as the labor force contracted by 363,000.
Leisure and hospitality again led job growth, adding 78,000.
Other big gainers included manufacturing (55,000), transportation and warehousing (52,000), Professional and business services (41,000), financial activities (35,000) and health care (34,000). Retail also showed solid growth, adding 29,000 primarily from gains in food and beverage stores.
Some of the details in the report, though, were not as strong.
The survey of households actually showed a decline of 353,000, leaving the level 761,000 short of where it was in February 2020, just prior to the start of the pandemic.
Stock futures moved lower as Wall Street digested the report and government bond yields were mostly higher.
The report likely will do little to sway the Federal Reserve from its current path of interest rate increases. The central bank announced Wednesday it would increase its benchmark interest rate half a percentage point in what will be an ongoing effort to stamp out price increases running at their fastest pace in more than 40 years.
“Overall, with labor market conditions still this strong — including very rapid wage growth — we doubt that the Fed is going to abandon its hawkish plans because of the current bout of weakness in equities,” said Paul Ashworth, chief U.S. economist at Capital Economics.
The job growth comes with U.S. economy experiencing its worst growth quarter since the start of the pandemic and worker output for the first three months that declined 7.5%, the biggest slowdown since 1947 and the second-worst quarter ever recorded. GDP was off 1.4% for the January-through-March period.
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