U.S. reports 253,000 new jobs in April

Employers in the US hired more workers than expected in April, with the country adding a healthy 253,000 jobs. The continued strength in the job market is defying economists’ predictions that the Federal Reserve’s year-long series of interest rate hikes would dampen hiring. The nation’s unemployment rate fell to 3.4% from 3.5% in the prior month, matching the lowest jobless rate since 1969.

While payroll growth had been slowing, falling from 427,000 in January to 165,000 in March, it unexpectedly reversed in April, according to the early estimate. The growth of new jobs in April defied consensus expectations for a cooling job market. Dave Gilbertson, VP at UKG, a payroll and shift management software company, noted that it was a “jack-in-the-box” labor market that keeps cranking until eventually a surprise pops up. He added that the job creation surge in April means the US is still in a tight labor market.

Some economists anticipate employers applying the brakes later in the year as the impact of the economic slowdown spreads to more businesses. Steve Rick, chief economist at CUNA Mutual Group, said that they were anticipating a mild downturn in the second half of 2023 as consumers’ spending slows. The Fed’s moves to slow the economy have had an effect, notably in the housing market, where steadily rising borrowing costs have brought sales of existing homes sharply lower in March from a year earlier. Investment in housing has cratered over the past year, and America’s factories are slumping, too.

But even as some areas of the economy show signs of cooling, employers continue to grapple with a tight labor market, leading many businesses to retain their existing workers. Some industries, notably professional and business services, health care and leisure and hospitality showed strong job growth last month, the Labor Department said. The Fed’s interest rate hikes have yet to throw the job market into reverse, but the economic slowdown may impact it later in the year.