The job market in the United States rebounded unexpectedly in April, with job creations rising and the unemployment rate falling, far from the expected slowdown in the fight against high inflation.
In April, 253,000 jobs were created, the Labor Department announced on Friday, compared to 165,000 in March – a figure revised down sharply.
Employment remains up in business services, health care, recreation and hospitality, as well as in social assistance, details the statement from the Department of Labor, published Friday.
As for the unemployment rate, it fell further, and fell to 3.4% (-0.1 point), as in January, its lowest level since 1969. Analysts were counting on 180,000 job creations and a rate of unemployment at 3.6%, according to several consensuses.
US President Joe Biden praised the numbers in a tweet: “My program for investing in America is working.”
A decline in job creation and a rise in the unemployment rate are however expected to manage to curb inflation. This, still very strong, had been fueled, among other things, by the significant growth in wages linked to the lack of manpower.
Wages thus continued to climb in April, but a little more slowly. The increase in the average hourly wage is 4.4% over one year, to 33.36 dollars, against 4.6% last month.
Job creations in the private sector alone, published on Wednesday, had set the tone, defying the forecasts, with 296,000 jobs created against 142,000 the previous month, according to the monthly ADP / Stanford Lab survey.
“Strength and Stability”
“There is good news for everyone in this jobs report,” said Nick Bunker, economist for job search site Indeed: “workers will be happy that unemployment remains low. […]. Employers will be delighted that labor market participation continues to grow,” he said.
And according to him, even the officials of the American central bank (Fed), on the front line to fight against high inflation, will find their account, “reassured by the gradual slowdown in the pace of hiring”.
However, he warns that “the turmoil in the financial market could cause turbulence”, in reference to the recent banking crisis, which has further tightened access to credit.
It is indeed up to the Fed to slow down economic activity, in the hope of putting an end to this rise in prices which has not been seen for 40 years.
To this end, it has been raising its rates for a year. This leads the banks to raise the cost of the loans they offer to households and companies, to weigh on consumption and investment, and put an end to the escalation in prices.
The Fed raised rates again on Wednesday, following its monetary policy meeting, for the 10e times in a row.
More jobs than workers
“We are seeing some evidence of easing labor market conditions,” CEO Jerome Powell told a news conference at the time, “but overall you have a 50-year low unemployment rate. years “.
“The demand for labor still greatly exceeds the supply of available workers,” he also commented.
At the end of March, there were still nearly 9.6 million job vacancies, according to the Labor Department’s JOLTS survey released Tuesday. It is, of course, in regular decline, but it remains at a very high level.
However, as economic activity slows under the pressure of rate hikes and the banking sector crisis, a recession cannot be ruled out, and unemployment is also expected to rise.
Nancy Vanden Houten, economist for Oxford Economics, thus anticipates a slowdown in employment growth linked to “a mild recession” to come, “the cumulative rate hikes and the tightening of lending standards weighing on the economy and the labor market in the second semester.
The boss of the Fed, however, still believes that it is possible to escape it. And, if there is a recession, it could be mild, with unemployment rising “lower than what has been usual in modern-era recessions”.