The upward trend continues as April shows strong job gains. Despite inflation’s continued rise, it has not yet caught up with the labor market. The Bureau of Labor Statistics released the monthly Employment Situation Summary this past Friday, which revealed a mixed bag of news.
In April, 428,000 jobs were added while unemployment remained at the pre-pandemic low of 3.6%. Growth was widespread across non-farm sectors with the biggest increase shown in leisure and hospitality. Within the sector, food services and drinking places added 44,000 jobs and accommodation added 22,000. As the issue of inflation continues to seize Americans’ wallets and curb spending, it is expected that the strong showing for the leisure and hospitality industries will slow in the coming months.
The report addressed a major economic issue currently facing Americans: wage gains. Average hourly earnings rose only .3% in April, not nearly enough to keep up with inflation, which is maintaining a forty year high. In the wake of The Great Resignation, we are seeing another wave of workers seeking higher paid jobs. This accounts for many of the resignations within the market. In the May 3rd Job Openings and Labor Turnover Summary for the month of March, the number of quits (voluntary separations by an employee) increased to a high of 4.5 million.
The positive showing of added jobs gave the central bank reason to raise interest rates for the second time since March 2022. Rates went up by a half point in early May, the largest increase in more than 20 years. The Federal Reserve is hoping to curb a looming recession, but stock market prices are plunging amid growing economic fears.
Employment in manufacturing increased by 55,000 jobs in April. Transportation and warehousing gained 52,000 jobs, financial activities added 35,000 and health care employment added 34,000 jobs this past month. While some industries, like transportation and warehousing, financial activities, and retail trade have met or exceeded pre-pandemic levels from February 2020, others, like health care, manufacturing, and leisure and hospitality are still seeking to restore lost jobs.