Job growth was higher than expected in April, keeping the Fed on its current track to raise rates. (iStock)
Job growth in the United States increased at a higher-than-expected rate in April, according to the latest Employment Situation Summary from the Bureau of Labor Statistics (BLS).
Total nonfarm payroll employment increased by 428,000 during the month, the report said, while the unemployment rate went unchanged — at 3.6%. Job gains were largely made in major industries such as leisure and hospitality, manufacturing and transportation and warehousing.
The growth is down slightly from the increase of 431,000 jobs in March, but is still a gain that was higher than anticipated for April. However, strong wage gains could worsen inflation in the coming months.
“The labor force participation rate has declined 0.2 percentage points compared to the previous month, indicating a slight decrease in labor supply,” said Dawit Kebede, Credit Union National Association (CUNA) senior economist. “Participation is expected to go up if the pandemic becomes less of a health concern. Strong demand for hiring, coupled with low labor supply, continues to increase wages, adding more inflationary pressure. A persistent imbalance in labor demand and supply may lead to a wage-inflation spiral.”
Other economists agreed inflation could get worse before it gets better as average hourly earnings increase. Fannie Mae Chief Economist Doug Duncan said that “wage growth is a clear signal…
