Wednesday, May 22, 2024

US jobs market slows but unemployment rate ties longest streak since 1960s

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The US economy underperformed expectations in April, adding only 175,000 nonfarm payroll jobs in that month, according to the Bureau of Labor Statistics. The news comes as the Federal Reserve seeks to cool inflation.

The unemployment rate also changed very little, remaining at 3.9 per cent. Indeed, this is the best streak of unemployment being below 4 percent since the 1960s.

The number is below what many expected. The ADP Employment Report projected that the US economy had added 192,000 jobs in April.

President Joe Biden hailed the number in a statement on Friday as a sign that the economy has rebounded from the Covid-19 pandemic. He specifically highlighted the growth of women in the workforce.

“I had a plan to turn our country around and build our economy from the middle out and the bottom up,” he said. “Now we are seeing that plan in action, with well over 15 million jobs created since I took office, working-age women employed at a record high rate, wages rising faster than prices, and unemployment below 4 percent for a record 27 months in a row.”

Hourly earnings also grew in April by 0.2 per cent, and the average hourly earnings grew by 3.9 per cent, which shows that wages have outpaced inflation.

Health care led the growth of jobs in April, adding 56,000 jobs, while social assistance added 31,000 jobs.

“There’s more work to do,” Biden said in his statement. “I have a plan to lower the cost of rent and home ownership by building 2 million homes; to cut taxes for middle-class families and American workers; and to continue making health care, prescription drugs, inhalers, and insulin more affordable.”

Biden hopes to make the economic recovery — particularly job and wage growth — a central part of his re-election campaign.

The numbers come after the Federal Reserve has sought to tame persistent inflation by keeping interest rates high. On Thursday, the central bank announced that it would keep interest rates where they are as opposed to raising them or cutting them.

In March, the BLS announced that the Consumer Price Index for All Urban Consumers rose by 0.4 per cent in the past month and by 3.5 per cent in the past 12 months.

“Federal Reserve Chairman Jerome Powell said data showed a need to keep rates high,” Federal Reserve Chairman Jerome Powell said in a press conference on Wednesday. “We have stated that we do not expect it will be appropriate to reduce the target range for the federal funds rate until we have gained greater confidence that inflation is moving sustainably toward 2 percent. So far this year, the data have not given us that greater confidence.”

The BLS will release its numbers for inflation later this month.

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