WASHINGTON (AP) – U.S. employers increased 428,000 jobs in April, extending a series of long-term hiring that challenges inflation, chronic supply shortages, Russia’s war against Ukraine and much higher loan costs.
Friday’s report on the jobs of the Department of Labor showed that last month the unemployment rate remained at 3.6%, slightly above the lowest level in half a century.
Wage growth in the economy has been extremely stable amid the worst inflation in four decades. Employers have added at least 400,000 jobs over 12 consecutive months.
It is unclear how long the job boom will last. This week, the Federal Reserve raised its key rate by half a percentage point – the most aggressive step since 2000 – and signaled a further significant rate hike. As the Fed rate hike takes effect, consumers and businesses are becoming more expensive to borrow, spend and hire.
In addition, the government provided enormous economic assistance to households. And Russia’s invasion of Ukraine has helped accelerate inflation and clouded economic prospects. Some economists warn of an increased risk of recession.
Currently, the stability of the labor market is particularly striking against the background of rapid price increases and rising cost of loans. This week, the Ministry of Labor presented additional evidence that the labor market is still thriving. It reported that only 1.38 million Americans received traditional unemployment benefits, the lowest since 1970. In March, employers posted a record high of 11.5 million vacancies and that layoffs remained well below pre-pandemic levels.
Moreover, now in the economy there are on average two jobs per unemployed person. This is the highest such share of all time.
And another sign that workers are enjoying an unusual lever of influence in the job market, a record 4.5 million people quit their jobs in March are clearly confident they can find better opportunities elsewhere.
The chronic shortage of goods, materials and labor has contributed to the rapid rise in prices – the highest inflation rate in 40 years. Russia’s invasion of Ukraine in late February dramatically worsened the financial landscape, raising world oil and gas prices and severely clouding the national and global economic picture.
At the same time, in many areas that are slowing down due to labor shortages, companies are raising wages to try to attract job applicants and retain their existing employees. Despite this, the increase in wages did not keep up with the jump in consumer prices.
That’s why the Fed, which most economists say was too slow to recognize the threat of inflation, is now aggressively raising rates. Its goal is obviously difficult: the so-called soft landing.
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