April Payrolls Rise by 428,000 Unemployment Holds at 3.6%

Emily McCormick |

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U.S. job growth remained robust in April as the unemployment rate held near its pre-virus low, further underscoring the still-tight domestic labor market. The U.S. economy has brought back payrolls each month so far in 2022, and April's payrolls gains still represented growth well-above pre-pandemic trends. In February, employment grew by 714,000, versus the 750,000 previously reported, while March employment was downwardly revised by 3,000 to reach 428,000. Meanwhile, the unemployment rate held steady in April at 3.6%, or just a hair above February 2020's level of 3.5% from before the pandemic. That, in turn, had been the lowest level for joblessness since 1969. And this came as the labor force participation rate unexpectedly dipped to 62.2% from March's 62.4%, suggesting a smaller share of the population was either employed or actively seeking work. Almost 500,000 workers decided to leave the workforce in April. The large decline is a concerning prospect for businesses that are facing one of the tightest labor markets in decades. Currently, there are 11.5 million job openings and only 5.9 million unemployed, causing a large mismatch in labor supply and demand that’s fueling wage growth. A further decline in the participate rate could exacerbate the labor supply shortage, resulting in further wage pressures that will inevitably flow through to broad-based inflation. On a month-over-month basis, average hourly earnings increased by 0.3%, slowing from March's upwardly revised 0.5% increase. And on a year-over-year basis, average hourly earnings were up 5.5%. The recent increases in payrolls and wages and decrease in the unemployment rate, however, have not given rise to a commensurate improvement in the financial wellbeing of many Americans. With inflation running at 40-year highs, price increases for consumer goods have outpaced earnings growth. The U.S. Consumer Price Index last rose at an 8.5% year-on-year rate in March or the fastest since 1981. "Wages are running high, the highest they've run in quite some time,” Fed Chair Powell said during his press conference. “And they are one good example ... of how tight the labor market really is. The fact that wages are running at the highest level in many decades. And that's because of an imbalance between supply and demand in the labor market."