US adds 428,000 jobs in April despite surging inflation

(NewsNation) —  America’s employers extended a streak of hiring in April, adding 428,000 jobs despite surging inflation and interest rates.

The report Friday from the Labor Department showed that last month’s job growth kept the unemployment rate to 3.6%, the same rate as the prior report and the lowest level since the pandemic erupted two years ago.

Stocks fell again Friday as the promising job report was released, capping off a tough week for Wall Street.

The economy’s hiring gains have been remarkably consistent in the face of the worst inflation in four decades. Despite the inflation surge, persistent supply bottlenecks, the damaging effects of COVID-19 and now a war in Europe, employers have added at least 400,000 jobs monthly since May 2021.

Demand for workers in the manufacturing industry and hospitality sector remains high, helping fuel Friday’s strong jobs report.

Politicians have been at odds however over the health of the economy. President Joe Biden this week touted the strength of the job market as a sign the economy was in good shape. Republican detractors were quick to note that inflation is at 40-year high and interest rates are rising.

Treasury Secretary Janet Yellen tweeted on Friday the jobs report was a “strong sign” for the economy’s recovery from the pandemic.

Greg McBride, the chief financial analyst at bankrate.com, said there were a lot of “strong underpinnings the economy” and “example A is the job market.”

The rally was short lived as the market took another dive Thursday.

Many questions remain for the stock market, said Sylvan Lane, a financial reporter for The Hill, primarily how strong the economy really is or isn’t amidst dueling narratives being rolled out by politicians.

“We just heard the April jobs report was quite stellar, but the thing economists are concerned about right now, and by extension the market is concerned about right now, is as the Fed hikes interest rates that’s going to slow the economy and the question is what’s that going to do to companies,” Lane said.

Tech stocks exploded in value during the pandemic but those stocks are now at the center of speculation over what will happen to market values, Lane said.

“The market is trying to process this unprecedented situation with a weird combination of really good things happening in the U.S. economy and a lot of issues happening in the local economy,” Lane said.

Some economists are forecasting a possible recession hitting in 2023, Lane said. The fear is the economy has grown too fast and eventually will slow down. Essentially is could be in a place where “it’s too good for it’s own good,” Lane said.

It’s unclear how long the jobs boom will continue. The Federal Reserve this week raised its key rate by a half-percentage point — its most aggressive move since 2000 — and signaled further large rate hikes to come. As the Fed’s rate hikes take effect, they will make it increasingly expensive for consumers and businesses to borrow, spend and hire.

“Trying to slow the economy just enough, without causing a recession,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics said of the Fed. “Their track record on that is not particularly good.”

Even so, pay raises haven’t kept pace with the spike in consumer prices: Adjusted for inflation, hourly wages have actually fallen for 12 straight months.

In addition, the vast economic aid that the government had been supplying to households has expired. And Russia’s invasion of Ukraine has helped accelerate inflation and clouded the economic outlook. Some economists warn of a growing risk of recession.

President Joe Biden is set to speak about the report Friday afternoon.

This story is developing. Refresh for updates.

The Associated Press contributed to this report.