The U.S. added 428,000 jobs in April and the unemployment remained at 3.6%, according to Bureau of Labor Statistics released on Friday.
The latest numbers beat economists and are good news for President Biden with inflation still at record highs.
The jobs numbers were released with Biden heading to Cincinnati, Ohio, to announce that five major U.S. manufacturers have made commitments to boost their reliance on small and medium American firms for 3D printing.
Biden cheered the ‘record setting job creation’ in his first 15 months, which now total 8.3 million, in a statement.
The latest figures come at a time of record inflation, which voters have increasingly registered as a top concern. But the 0.3% growth in hourly earnings trailed estimates.
The gains also come despite continuing supply chain problems, a pandemic that has the Chinese metropolis of Shanghai on lockdown, and Russia’s war on Ukraine showing indications of becoming a protracted conflict.
‘Our plans and policies have produced the strongest job creation economy in modern times. The unemployment rate now stands at 3.6% —the fastest decline in unemployment to start a President’s term ever recorded,’ he said in a statement.
‘There have been only 3 months in the last 50 years where the unemployment rate in America is lower than it is now.’ He called it a ‘direct result of the American Rescue Plan, our COVID vaccination program, and my plan to grow our economy from the bottom up and middle out.’
‘When I took office, there were around 20 million people relying on unemployment benefits to feed their families; today, that number is around 1 million – the lowest since 1970. We are building an economy that values the dignity of work.’
He also said there was ‘no question’ inflation and high prices are a ‘challenge’ for families. He called fighting inflation a ‘top priority.’
‘I encourage Congressional Republicans to join us in our efforts to lower prices for families across the country, by making more in America, strengthening our supply chains, and cutting the energy and prescription drug costs,’ he said.
The Federal Reserve’s Board of Governors hiked interest rates by 50 basis points this week, following up on a pledges to undertake efforts to tamp down inflation.
It all brought a rocky week in the stock market, where tech stocks and other securities took a dive Thursday, snatching away Wednesday’s gains.
The monthly gains continuing a running streak: with employers adding more than 400,000 jobs for 12 months in a row.
The White House said GE Aviation, Honeywell, Lockheed Martin, Raytheon and Siemens Energy have agreed to take part in the program, which Biden will highlight during a visit to United Performance Metals in Hamilton, Ohio.
The program is being unveiled by the White House as Biden heads to the industrial Midwest to press Congress to approve a stalled competition and innovation bill that the Democratic president says is critical to bolstering domestic manufacturing and helping solve a semiconductor shortage that has delayed production of life-saving medical devices, smartphones, video game consoles, laptops and other modern conveniences.
‘I´m determined to make sure the United States holds the technological high ground in competition with other nations, especially China, as we move forward,” Biden said this week. His comments on the Bipartisan Innovation Act came during a visit Tuesday to an Alabama Lockheed Martin plant building Javelin antitank weapon systems.
The Department of Labor this week also reported only 1.4 million Americans were collecting unemployment, a low water mark since 1970.
Wall Street’s main indexes opened lower on Friday as the stronger-than-expected jobs data amplified investor concerns that rising wages will continue to fuel inflation and push the Federal Reserve toward faster rate hikes.
At 10am, the Dow Jones Industrial average was down 468 points, or 1.42 percent. The S&P 500 lost 1.67 percent and the Nasdaq dropped 2.29 percent.
It followed the Dow’s worst day since the 2020 pandemic crash on Thursday, as investor sentiment cratered in the face of concerns that the Fed’s interest rate hike would not be enough to tame soaring inflation.
Though the strong employment gains speak to the economy’s underlying strength, fears are mounting that a labor shortage will combine with high inflation to create a ‘wage-price spiral’ and send consumer prices out of control.
Friday’s data show that the unemployment rate remained unchanged at 3.6 percent in April, while average hourly earnings increased 0.3 percent against forecast of a 0.4 percent rise.
Concerningly, the labor force participation rate, which measures the percentage of working-age Americans either working or seeking work, remained unchanged at 62.2 percent, a level that prior to the pandemic was last seen in the 1970s.
The Fed is counting on more Americans to re-join the workforce to tame rising wages, a shift that is so far slow to develop.
While rising wages are usually a boon to workers, they can be a double-edged sword if they force companies to make swift price increases for the goods and services they sell.
And indeed, the average wage gains seen by American workers in the past year have been more than erased by the high inflation rate, leaving them worse off than they were before.