The US labor market is showing signs of resilience as employers added 253,000 jobs in April, defying expectations for a further slowdown. The unemployment rate also fell to 3.4%, matching January’s rate, which was the lowest since 1969. However, downward revisions to previous months’ data subtracted 149,000 jobs, bringing the three-month average to 222,000 jobs, a slowdown from 2022’s average of 400,000 jobs.
Why it matters: The resilience of the labor market has so far defied the impact of three bank failures and the resulting pullback on lending, which is expected to hit small businesses particularly hard and the rise in wages has been noticeable among those at the bottom of the pay scale. The unemployment rate for black Americans fell to a record low in April, and the share of people in their prime working years participating in the labor market reached 83.3%, matching levels not seen since 2008.
- Job growth was broad-based, although less vigorous than the previous year, with sectors such as construction, retail, and manufacturing experiencing gains. There is underlying strength to the labor market, even when there are cracks of weakness, according to Karin Kimbrough, chief economist at LinkedIn.
- The rebound in immigration has also helped ease labor shortages, especially in fields such as leisure and hospitality and healthcare.
- The outflow from internet companies like Google and Meta has been a particular boon for other industries that had been desperate for people with digital skills.
