US jobs market posts blockbuster gains in April

The United States jobs market kept powering ahead in April, adding a whopping 263,000 jobs.

The latest readings from the US Labor Department blew away analysts’ expectations and signalled that the US economy continues to find solid footing after a wobbly start to the year.

“Employment growth grew impressively in April, and other than a weak reading in February, remains near its 200,000 jobs-per-month trend that has prevailed since the beginning of the expansion,” Brian Schaitkin, senior economist with The Conference Board, told Al Jazeera.

The Labor Department also revised its employment figures for February and March to show a combined 16,000 more jobs were created than previously reported.

In a further positive sign for American workers, average hourly earnings in April were 3.2 percent higher than a year earlier, marking the ninth straight month wage growth has topped three percent. 

And the unemployment rate continues to hover near 50-year lows, ticking slightly downward last month to 3.6 percent. The fall was driven in part by a drop in the number of Americans either working or actively looking for work.

As the data points to a tightening labour market, some economists believe the galloping pace of hiring will start to taper.

“We still expect hiring will slow over the course of 2019,” Leslie Preston, senior economist with TD Bank, wrote in a note to clients. “With unemployment near a record low, supply constraints will begin to bind. This will mean more muted monthly payroll gains, consistent with a mature phase of the economic cycle.” 

There were some less positive aspects to April’s jobs report. The average number of hours worked in a week fell back slightly, to 34.4 hours.

But overall, the labour market picture bolstered the view expressed by Federal Reserve Chairman Jerome Powell earlier this week that the Fed (the US central bank) can afford to be patient with interest-rate policy.

“I see us on a good path for this year,” Powell told reporters Wednesday at the conclusion of the Fed’s two-day policy meeting, where it voted unanimously to leave interest rates unchanged.

On Tuesday, President Donald Trump took to Twitter to pressure the fed to slash interest rates and even reinstate crisis-era economic stimulus measures.

But April’s stellar jobs report raises the bar on potential interest rate cuts.

A key question for Fed policymakers is whether stronger wage growth will lead to higher prices. That could influence the Fed’s thinking on whether to cut rates in order to boost inflation or raise rates in order to curb it.