The US economy added 428,000 jobs in April, unemployment at 3.6%, but the participation rate fell

The US economy added 428,000 jobs in April and the unemployment rate remained stable at 3.6 percent, the Department of Labor announced on Friday.

Economists expected the economy to add 400,000 jobs and the unemployment rate to remain unchanged from the previous month at 3.6%. The forecast range of economists polled by Econoday was between a gain of 300,000 and a gain of 500,000.

The labor force participation rate unexpectedly dropped to 62.2% from 62.4%.

The average hourly wage of all nonfarm private sector employees rose 10 cents, or 0.3%, to $31.85 in April. Over the past 12 months, the average hourly wage has increased by 5.5%. In April, the average hourly wage for private sector production and non-supervisory employees rose 10 cents, or 0.4%, to $27.12. This represents a deceleration in wage gains from the overall 0.4% recorded in March, likely due to many of the jobs added in April being at the lower end of the wage scale.

The economy created jobs at a blistering pace in the first three months of the year despite the economy contracting by 1.4%. Employers hired nearly 1.7 million new workers in the first quarter, an average of 562,000 per month. At the end of March, there were a record 11.5 million job openings and a record 4.5 million workers who voluntarily left their jobs, usually a sign they expect to find easily better paid work elsewhere.

Employment figures for February and March have been revised down. After the revisions, employment in February and March combined was 39,000 lower than previously reported figures.

The US economy has rebounded from the pandemic much faster than expected and faster than economies around the world. The labor market, in particular, quickly recovered much of the damage from the 2020 lockdowns and social distancing, with the unemployment rate falling much faster than expected. Demand for goods soared as US incomes were boosted by stimulus money from various government programs and social distancing rules cut people off from many leisure service activities – sports, concerts, travel , films – which would have usually emptied bank accounts.

The supply side of the economy could not keep up with the move towards spending on goods, especially with many exporting countries also struggling with the pandemic. Chinese ports have suffered a series of closures as part of the country’s zero tolerance policy for Covid. Various stages of the global supply chain for semiconductor manufacturing have also collapsed, creating shortages that have forced makers of everything from cars to appliances to phones to slow production.

Thanks to unusual trade imbalances, shipping containers are scarce in some places while containers have remained empty in others. But even though that was resolved, US ports around Los Angeles were overwhelmed with incoming ships, leading to long delays. American businesses, fearing holiday shortages, rushed to stock shelves and warehouses early and warned consumers to shop early. US households heeded this advice, buying heavily in October and early November, encouraging retailers to expect even more purchases than usual during the traditional post-holiday shopping season. It turned out that the first wave of buying was followed by a pullback, leaving wholesalers and retailers with undesirable inventory levels.

The first months of this year saw some of the port congestion dissipate and imports reached record levels. At the same time, businesses slowly built up inventories as they halted accidental hoarding over the 2021 holiday season. This combination of booming imports and falling inventories is driving the drop in GDP in the first quarter.

Meanwhile, inflation engulfed the US economy. Despite signs that the economy’s demand had picked up and supply was tight, the Federal Reserve continued to hold rates low, fearful of repeating past mistakes of withdrawing economic support too soon. Likewise, the Biden administration and Democrats led by House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer (D-NY) have launched a massive spending program called the American Rescue Plan. .

The result: a burst of inflation that Fed policymakers and the Biden administration say will be transitory. But as supply chains remained under strain and prices continued to climb last year, Fed officials ditched the word transitional and rushed to adopt an inflation-fighting stance. At the end of the year, inflation was 7%, the highest in nearly 40 years. During the first months of this year, inflation continued to rise and reached 8.5% in March.

Seeking to tame inflation, Federal Reserve Chairman Jerome Powell and his fellow Fed officials raised interest rates by a quarter point at their March meeting and by a half point at the next meeting in May. They have signaled that they will raise their target interest rate by at least half a percentage point in the next two meetings and expect increases of a quarter point thereafter. At a press conference the last


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