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The numbers: The U.S. added a solid 428,000 new jobs in April, but an acute labor shortage showed little improvement last month and threatens to add to the highest inflation in 40 years.
Economists polled by The Wall Street Journal had forecast 400,000 new jobs.
The unemployment rate was unchanged at 3.6%, the government said Friday, just a few ticks above a 54-year low.
The size of the labor force, meanwhile, shrank in April for the first time in seven months in a sign of how difficult it is for companies to find workers.
As a result, the so-called rate of participation in the labor market dropped to 62.2% from 62.4%, leaving it more than a full percentage point below pre-pandemic levels.
The April employment report won’t have any sway on the Federal Reserve’s plan to raise interest rates sharply this year. The central bank lifted rates on Wednesday for the second time since March as part of an effort to contain the worst outbreak of U.S. inflation since the early 1980s.
Although one of the Fed’s two mandates is to foster a strong jobs market, the bank is worried that a persistent labor shortage will drive up wages too much and add to intense inflationary pressures already squeezing the economy.
A record number of open jobs in the U.S. aren’t being filled very quickly because of a major labor shortage.
stefani reynolds/Agence France-Presse/Getty Images
The cost of living has jumped 8.5% in the past year, marking the biggest increase since 1982.
Wages are also climbing rapidly, but not quite as fast. Hourly pay rose sharply again in April and put the increase in the past 12 months at 5.5% — also the biggest gain since the early 1980s.
Market Reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to open lower in Friday trades.
Stocks gyrated wildly in the past two days as investors sought to figure out whether the U.S. economy is sturdy enough to withstand a rapid increase in interest rates by the Federal Reserve.
