The economy beat expectations and added 428,000 jobs last month, a sign that the labor market is still gaining strength despite high inflation and a contraction in GDP in the first quarter.
The reading follows several months of strong job gains, which is positive economic news that President Joe Biden has touted even as painful inflation eats into the paychecks of people across the country.
The unemployment rate was steady at 3.6% in April, near the ultralow level it was at right before the coronavirus pandemic shocked the U.S. economy. Labor force participation dropped slightly to 62.2%, the lowest it has been in three months, with the participation rate for workers in their prime working years also tumbling a bit.
“Amid all the world’s troubles and volatility in financial markets, the job market grinds on,” said Mark Hamrick, the senior economic analyst for Bankrate.
Job growth is expected to slow in the coming months as the Federal Reserve jacks up interest rates in response to soaring inflation. By raising rates, the central bank intends to slow spending, something that causes price increases to lessen.
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The Federal raised its interest rate target by half a percentage point on Wednesday. The hike was more aggressive than usual and is analogous to two typical rate hikes at once, something that hasn’t been done since 2000.
“The economy and the country have been through a lot over the past two years and have proved resilient,” Fed Chairman Jerome Powell said at a press conference this week. “It is essential that we bring inflation down if we are going to have a sustained period of strong labor market conditions that benefit all.”
One factor that has given the Fed confidence to tighten its monetary policy has been the strong labor numbers.
Still, some economists think the central bank is doing too little, too late, given the relative strength of the labor market and the tenacity of the country’s inflation. When asked whether even more aggressive hikes were in store, Powell disappointed some in saying that it is not something that Fed officials are “actively considering.”
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There are also concerns that the Fed’s actions to tighten its monetary policy could knock the economy into a recession, a prospect that would further imperil Democrats and Biden heading into this year’s midterm elections.
