WASHINGTON (AP) — Domestic employers pulled back on hiring in April but still added a sizable 175,000 jobs as continued high interest rates may begin to slow the robust U.S. job market. It shows that there is a gender.
Friday’s government report showed job growth last month was down sharply from March’s massive gain of 315,000. It was also well below the 233,000 increase that economists had predicted in April.
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But the slower pace of hiring, combined with a slowdown in wage growth last month, is welcome to the Federal Reserve, which has kept interest rates at 20-year highs to combat persistently high inflation. Probability is high. The rate of increase in hourly wages was lower than expected, increasing by 0.2% compared to March and 3.9% compared to the previous year, the smallest annual increase since June 2021.
The Fed has been holding off on considering rate cuts until it has more confidence that inflation is steadily slowing toward its 2% goal. Interest rate cuts by central banks will, over time, reduce the cost of mortgages, auto loans, and other borrowings for consumers and businesses.
March 18, 2008 photo of the US Federal Reserve Board building in Washington. (Reuters/Jason Reid/File Photo)
Stocks soared and bond yields fell after Friday’s jobs report on hopes that interest rate cuts are more likely in the coming months.
Rubera Farooqi, chief U.S. economist at High Frequency Economics, said: “A reasonable slowdown in payrolls to start the second quarter is likely due to (the Fed’s) policy This should be welcome news for planners.” “Current statistics also support the view that rate cuts, not rate hikes, are the Fed’s base case for this year.”
As the November presidential election race heats up, the economic situation is weighing on voters’ minds. Despite a strong job market, Americans overall remain angry about high prices, and many are blaming President Joe Biden.
Despite the slowdown in hiring in April, employment growth rose solidly last month, but the monthly rate of increase was the lowest since October. As national household spending continued to stabilize, many employers had to continue hiring to meet customer demand.
Although the unemployment rate rose to 3.9% from 3.8% in April, it was the 27th consecutive month the unemployment rate remained below 4%, the longest in Thailand since the 1960s.
“It’s certainly the best jobs report we’ve ever seen,” said Michael Pugliese, senior economist at Wells Fargo. “But it’s not dire. 175,000 is still pretty strong. “An unemployment rate of less than 4% is still quite healthy.” He expects active hiring to continue to slow by an average of 242,000 jobs from February to April.
Last month’s hiring was led by health care companies, which added 56,000 jobs. The number of warehouse and transportation companies increased by 22,000, and the number of retailers increased by 20,000. Governments at all levels were hiring aggressively, but only 8,000 jobs were added in April, the lowest monthly total since December 2022.
Local governments didn’t add any jobs last month. Paul Ashworth of Capital Economics noted that state and local government revenues have been weak recently.
Temporary help jobs fell by more than 16,000. These positions are also often seen as a potential indicator of where the job market is headed, as companies may try out temporary workers before deciding to hire them full-time.
The share of adults with jobs or looking for work remained unchanged at 62.7%, well below pre-pandemic levels.
America’s job market has repeatedly proven to be stronger than almost anyone expected. When the Fed began aggressively raising interest rates two years ago to counter a severe spike in inflation, most economists believed the resulting rise in borrowing costs would trigger a recession and push unemployment to painfully high levels. I expected it to rise to .
The Fed raised its base interest rate 11 times between March 2022 and July 2023, the highest level since 2001. Inflation has steadily declined as expected, rising from a year-on-year peak of 9.1% in June 2022 to 3.5%. % March.
However, the job market supported by strong consumer spending and the overall resilience of the economy have kept inflation above the Fed’s 2% target.
The job market is finally showing other signs of slowing. This week, for example, the government reported that job openings fell to 8.5 million in March, the lowest in more than three years. Still, this is a very high number of job openings. Before 2021, the number of monthly job openings never exceeded her 8 million, but since March 2021, it has exceeded this standard every month.
On a month-on-month basis, consumer inflation has not declined since October. Inflation in March was 3.5% from a year earlier, still well above the Fed’s 2% target.
Stephen Kramer, CEO of WorkJam, an online platform that helps retailers, hospitality and other companies manage tasks and training for hourly workers, said pressure to raise wages is easing. He said he was aware of something. But in the face of still-stubborn inflation, companies are focused on offering shift flexibility to workers who are increasingly juggling multiple jobs to pay the bills. That’s what he sees. “We’re allowing workers to swap shifts or choose shifts,” he said.
Onur Kutlebay, CEO of Totowa, N.J.-based U Parcel, which provides delivery services to small e-commerce companies, finds skilled workers such as forklift operators and supervisors. He said finding unskilled workers is easier, although it remains difficult to find workers.
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You Parcel has 43 employees across eight warehouse and storage facilities, most of which are located in New Jersey. Kutlebai said we must continue to raise wages for highly skilled workers. In 2020, the price of a skilled worker was $16. Currently, hourly rates start at $25. The starting wage for unskilled workers is currently $16. In 2020, this number was around $11.
He noted that people tend to prefer working as Uber drivers or for delivery companies like DoorDash, saying, “These jobs give you the opportunity to earn tips from customers.” “They tend to be more attractive to people, so they move away from regular jobs like the rest of us.”
