The labor market is still defying gravity.
Employers added 253,000 jobs in April, the Labor Department reported Friday, in a reversal of the cooling trend that had marked the first quarter and was expected to continue. The unemployment rate was 3.4 percent, down from 3.5 percent in March.
The higher-than-forecast number complicates the Federal Reserve’s shift this week toward a pause in interest rate increases. Chair Jerome H. Powell said on Wednesday that the central bank might continue to raise rates if new data showed the economy wasn’t slowing enough to keep prices down.
“Every time we’ve made some employment growth forecast, the labor market has beat expectations,” said Mervin Jebaraj, director of the Center for Business and Economic Research at the University of Arkansas.
Since early 2021, the labor market has been uncommonly tight as employers struggled to reverse a sudden mass layoff and navigate huge shifts in the demand for goods and services. The unemployment rate reached its lowest point since the 1960s. Wages at the low end of the pay scale rose faster than they had in decades.
In recent months, however, that exceptional mismatch between the supply and demand for workers began coming into balance. Job postings, which had reached nearly double the number of available workers, tumbled in the first quarter. And a rebound in immigration eased labor shortages, especially in fields like leisure and hospitality and health care.
“I think one of the clearest implications that we’ve seen from the increased flows of work visas is the easing of supply constraints and the uptick in participation,” said Courtney Shupert, an economist at the consulting firm MacroPolicy Perspectives.
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