Anyone looking for signs of an imminent downturn for the U.S. economy won't find it in the latest employment data.
That's the takeaway from the monthly jobs numbers out Friday, which showed an acceleration in hiring and pay gains in April as working-age Americans continued streaming back into the labor market.
The combination of rising employment and wages is helping to underpin consumer spending even as banking turmoil is raising recession fears. While faster pay growth will keep the Federal Reserve uneasy about inflationary pressures, it likely won't be enough to spur the U.S. central bank back into action after signaling earlier this week that its tightening cycle will probably pause for now.
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"Labor market momentum is decelerating from a high level, but I don't see signs here that it's rolling over or that a recession is imminent," said Blerina Uruci, chief U.S. economist at T. Rowe Price. "But I do think the rapid tightening in monetary policy and the recent shock to credit conditions are eventually going to drive the U.S. economy into some kind of a contraction."
Nonfarm payrolls increased 253,000 last month following a downwardly revised 165,000 advance in March, Bureau of Labor Statistics figures showed. The unemployment rate fell back to a multi-decade low of 3.4%, defying expectations for an uptick.
Job growth was broad-based, reflecting gains in healthcare, professional and business services as well as leisure and hospitality. However, the prior two months of payrolls were revised lower by a combined 149,000.
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The latest figures underscore the resilience of labor demand despite growing concerns about the toll high interest rates, inflation and tightening credit conditions are projected to take on the economy. While some businesses have paused hiring or laid off workers, others are still boosting pay in an effort to fill a multitude of open positions.
The labor market is coming more into balance — not only are job postings declining, but more people have been coming off the sidelines in recent months. For those aged 25-54, the labor force participation rate — the share of the population that is working or looking for work — climbed in April to 83.3%, the highest since 2008.
