The job market continues to defy gravity.
Employers added 253,000 jobs in April, the Labor Department reported Friday, reversing a cooling trend seen in the first quarter that is expected to continue. The unemployment rate was 3.4 percent, down from 3.5 percent in March.
The higher-than-expected number complicates the Fed’s shift this week toward a pause in rate hikes. Bank President Jerome H. Powell said on Wednesday that the central bank may continue to raise interest rates if new data shows the economy hasn’t been slowing enough to keep rates low.
“Every time we project some employment growth projections, the job market has exceeded expectations,” said Mervyn Jabbaraj, director of the Center for Business and Economic Research at the University of Arkansas.
Since early 2021, the labor market has been uncharacteristically tight as employers struggled to reverse sudden mass layoffs and navigate huge shifts in demand for goods and services. The unemployment rate is at its lowest level since the 1960s. Wages at the bottom of the wage scale have risen faster than they have been in decades.
But in recent months, this extraordinary disparity between labor supply and demand has begun to balance out. Job advertisements, which reached nearly twice the number of available workers, fell in the first quarter. The boom in immigration has also eased labor shortages, particularly in areas such as entertainment, hospitality, and health care.
“I think one of the clearest effects we’ve seen from increased work visa flows is an easing of supply restrictions and an increase in participation,” said Courtney Schubert, an economist at consulting firm MacroPolicy Perspectives.
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