US job gains and wages pick up, signaling labor resilience

People walk by a hiring sign published on the outside of a Target store on April 7, 2023, in Novato, California. U.S. hiring and employees & #x 2019; pay gains accelerated in April. (Justin Sullivan/Getty Images/TNS).
U.S. hiring and employees' pay gains accelerated in April, showing indications of labor-market durability and fresh inflationary pressures in the face of financial headwinds.

Nonfarm payrolls increased 253,000 after a downwardly modified 165,000 advance in March, a Bureau of Labor Statistics report showed Friday. The unemployment rate fell back to a multi-decade low of 3.4%.

The job growth was broad-based, showing gains in healthcare, professional and company services in addition to leisure and hospitality. Nevertheless, the previous two months of payrolls were revised lower by a combined 149,000.

The current figures highlight the resilience of labor demand despite growing issues about the toll high interest rates, inflation and tightening credit conditions are forecasted to handle the economy. While some services have paused hiring or laid off employees, others are still improving pay in an effort to fill a multitude of employment opportunities.

The S&P 500 opened higher, Treasury yields increased and the dollar reinforced.

The information come just after the Federal Reserve raised interest rates for a Possibly last and 10th time of this cycle in an effort to tame inflation. Chair Jerome Powell has said that will likely require a period of below-trend growth and softer labor-market conditions.

Part of what the Fed would like to see is a further easing in pay gains. That didn't take place in Friday's report - - typical hourly profits increased 0.5% in April, the most in about a year on an unrounded basis. From a year back, they were up 4.4%.

" The labor market stays exceptionally tight," said Diane Swonk, primary economic expert at KPMG LLP. "The Fed left the door open to additional rate hikes for a factor. This information is not as reassuring on a time out as we would like.".

The labor market, however, is coming more into balance - - not just are job postings declining, however more people have actually been coming off the sidelines in current months. For those aged 25-54, the labor force participation rate - - the share of the population that is working or looking for work - - climbed in April to 83.3%, the greatest since 2008.

Powell, who's stated his own expectation is that the economy will grow modestly this year, still acknowledged that the US could experience a "moderate economic crisis." Lots of financial experts, nevertheless, see the labor market degrading more rapidly in the 2nd half of the year, underpinning expectations of a downturn.

Several policymakers have stated the Fed won't cut rates this year, however traders still do not buy it. They pared those bets rather after the report.