Despite the banking crisis, employment creation in the United States remains healthy.
Despite the turbulence in the banking industry and the impact of increasing borrowing prices, job creation in the United States remained healthy last month.
Employers added 253,000 jobs, exceeding many analysts’ expectations.
The unemployment rate dropped to 3.4%, a multi-decade low.
The improvements served as a reminder of the US labor market’s resilience in the face of vigorous measures by the US central bank to cool the economy.
In little more than a year, the Federal Reserve boosted its benchmark interest rate from near zero to between 5% and 5.25%, a dramatic adjustment aimed at slowing price increases that were the fastest in decades last year.
These hikes have significantly increased the cost of purchasing a home or car, as well as making borrowing to expand a business or incur other debt more expensive. In principle, this should slow the economy and relieve the pressures that are pushing up prices.
However, while job growth has slowed since last year, it continues to outperform analysts’ estimates of what is required to keep up with population growth.
The Labor Department reported on Friday that hiring was lower than originally projected in February and March.
However, job creation resumed last month, with wages rising 4.4% year on year.
“Today’s report clearly suggests weakening labor markets, most obviously in the downward revisions of prior months data,” said Ronald Temple, chief market strategist at Lazard.
Many experts predict that the US economy will enter a recession later this year, citing significant slowdowns in important industries such as housing.
Big corporations like Facebook-owner Meta, Amazon, entertainment behemoth Disney, banks, and others have announced job cuts in recent weeks.
The rate hikes further exacerbated the turbulence in the banking industry, which has seen the most significant spate of collapses since the 2008 financial crisis.
However, Jerome Powell, the chairman of the US Federal Reserve, stated this week that the continued strength of the labor market gave him faith that this time would be “different” – and the US would escape a slump that would put millions out of work.