U.S. Economy Continues to Increase at a Robust Pace: April Labor Report

(Bloomberg) — The U.S. economy continued to expand in April, with strong hiring and wage growth.

However, a moderation of the participation rate has indicated that there is still plenty of room for improvement on employment levels despite an already tight labor market.

The U.S economy added a seasonally-adjusted 428,000 nonfarm payrolls in April according to data released this morning by the Labor Department

This is an increase from March’s revised figure of 380.000 and matching expectations earlier last week when Bloomberg surveyed economists speculation about future revisions being between 20%-30%.

Meanwhile, unemployment held steady at 3.6%.

Ten-year Treasury notes were slightly higher, while U.S stock futures rose and the dollar fell at today’s trading session in New York City.

The labor market is heating up. Job openings and quits are at record highs, with businesses desperate to hire enough workers for the resilient consumer demand that keeps on giving them headaches even when wages rise rapidly in an effort not just keep up but ahead of inflation.

But many employees haven’t seen their incomes increase as much or stay stable over time despite this fierce competition.

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Friday’s report on wages shows that while the pace of increase in average hourly earnings may have been slower than expected, it is still up 5.5% from last year and suggests more stability for labor markets going forward.

Jerome Powell, the chair of Federal Reserve warned Wednesday that he expects wage growth to slow and inflation “without having a recession with high unemployment.” 

The economy has been running hot over recent months but it’s not all good news for Fed officials – there are risks if prices stay elevated or grow even higher than expected because this could lead businesses into cutting back on hiring more people altogether which would result in an increase in unemployment.

While the Fed’s preferred inflation measure is currently below their target, Powell said he believes it will return to that level over time.

In a move that has been anticipated for some time, this week’s policy meeting saw interest rates raised by the most since 2000.

Powell indicated he may adjust these increases in upcoming meetings as well, which could lead to even higher borrowing costs on American consumers who are already struggling with high debt levels due largely because of recent tax cuts.

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