Employment in the United States took a hit in April, indicating that the Federal Reserve's actions to slow economic growth and combat inflation are impacting the labor market.
In April, employers only added 175,000 jobs, while the national unemployment rate remained steady at 3.9%, as reported by the U.S. Department of Labor on Friday. Economists surveyed by FactSet had predicted a higher number, estimating around 232,000 new jobs.
The unemployment rate has stayed below 4% for 27 consecutive months, marking the longest period since the 1960s.
Following a remarkable job growth in March, with a surprising addition of 315,000 jobs, the latest employment data shows a different trend. The Federal Reserve, in response to strong economic expansion and persistent inflation, has postponed plans to lower borrowing costs for individuals and businesses.
On Wednesday, the central bank announced that it would maintain its benchmark interest rate at a level of approximately 5.3%, a two-decade high. Fed Chair Jerome Powell acknowledged the slower decline of inflation compared to initial expectations. Since March 2022, the Fed has increased its short-term rate 11 times in an effort to control rising inflation as the economy recovered from the pandemic.
U.S. Economy Defies Expectations of Recession
Despite predictions from economists that tightening monetary policy would push the U.S. into recession this year, the economy has continued to thrive. Robust job gains, healthy consumer spending, and strong corporate profits have all contributed to keeping the economy on track.
