US Labor Market Adds More Jobs than Expected

The US labor market gained 253,000 jobs in April, a surprising increase at a time when many

expected a slowdown in the job market.

The unemployment rate slid to 3.4% — matching a half-century low hit in January — from 3.5% the month before. Economists were betting on job growth to fall for the third consecutive month, with the consensus number of new jobs added expected to be around 180,000. Economists also expected the unemployment rate to increase to 3.6% and not decline.

In April, average hourly earnings heated up, rising 0.5% from the previous month and increasing 4.4% over the past year. In March, the monthly and annual measures of wage gains in the private sector were up 0.3% and 4.3%, respectively.

A continued slowdown in job growth had been expected, especially considering the Fed’s continued interest rate increases and uncertainty around the banking sector.

The continued durability of the labor market provides a sense of hope that the much talked about “soft landing” is still possible. Federal Reserve Chair Jerome Powell recently repeated his hope for reduced inflation that did not come with a marked rise in unemployment and an accompanying recession.

The latest strong jobs report could influence the Fed in the next 40 days, before its next

policymaking meeting, to adopt a more hawkish interest rate approach, after it was weighing a

pause after 10 straight rate hikes.