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US jobs numbers push ahead despite GDP hit

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US job growth rose more-than-expected in April, underscoring the economy’s strong fundamentals despite a contraction in GDP in the first quarter.

Farm payrolls rose by 428,000 jobs last month, the Labor Department said in its closely watched jobs report.

March data was revised slightly lower, showing 428k job creation instead of 431k as previously reported.

Economists polled by Reuters had forecast an increase in jobs of 391,000 jobs. Estimates ranged from 188,000 to 517,000. The unemployment rate remained unchanged at 3.6 percent.

“It’s unclear whether a larger Fed job gain would be a cause for concern or a source of relief,” said Lou Crandall, chief economist at Wrightson ICAP in Jersey City.

“Stronger growth, reflecting individuals’ willingness to return to the labor market, would tend to dampen labor costs, while growth from higher wage offers from employers suffering from labor shortages would have the opposite effect.”

The Federal Reserve is attempting to tighten monetary policy to bring down inflation without plunging the economy into recession.

The US Federal Reserve raised interest rates by half a percentage point on Wednesday, the biggest hike in 22 years, and said the Fed will start deleveraging next month. It began raising interest rates in March.

“The job market is extremely tight and inflation is way too high,” Fed Chair Jerome Powell told reporters.

Last month’s job gains underscored the economy’s strong fundamentals, although output contracted in the first quarter under the weight of a record trade deficit.

There were a record 11.5 million job vacancies on the last day of March, widening the job-to-worker gap from 3.1 percent in February to an all-time high of 3.4 percent of the labor force.

Average hourly earnings rose 0.3 percent after rising 0.5 percent in March. That brought annual wage growth down to a still robust 5.5 percent from 5.6 percent in March.

Compensation for American workers posted the largest increase in more than three decades in the first quarter, helping to bolster domestic demand.

Although Mr Powell said a 75 basis point hike is not on the table, some economists believe the Fed could raise its benchmark interest rate above its neutral rate, which is estimated at 2-3 percent.

https://www.independent.ie/business/world/us-job-numbers-are-powering-ahead-despite-gdp-hit-41623614.html US jobs numbers push ahead despite GDP hit

Fry Electronics Team

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