BREAKING: The economy exceeded expectations in April and added 253,000 jobs, a sign that the labor market is still holding up despite the Federal Reserve's rate-hiking campaign and turmoil in the banking sector.
The headline job growth number in Friday’s employment report from the Bureau of Labor Statistics was more than predicted and the unemployment rate fell to 3.4%, a historically low figure.
The stronger jobs report shows that rate hikes aren’t yet slowing economic activity and could cause the Fed to lean toward tightening monetary policy further. The reading follows several months of strong job gains, which has been key positive economic data that President Joe Biden has touted even as historic inflation cuts deeply into the paychecks of people across the country. Recent jobs reports have proven surprisingly resilient, with the unemployment rate even declining to the lowest level since 1969 in January.
Although job growth proved surprisingly resilient through the first part of the year, there have been a few signs that the tide is turning. Jobless claims, a proxy for layoffs, have drifted up over the course of the year. The number of job openings, meanwhile, dropped below 9.6 million in March, the lowest level in about two years, according to the Bureau of Labor Statistics.This week the Fed once again raised interest rates by another quarter of a percentage point.
Most investors expect this week’s rate revision to be the last of the year and that by year’s end the central bank will begin cutting interest rates by as much as a full percentage point, according to futures contract prices for rates in the short-term market targeted by the Fed.
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