Despite the upheaval in the banking industry and the effects of increasing borrowing prices, job growth in the US remained strong last month.
253,000 new positions were added by employers, which was more than many analysts had predicted.
The unemployment rate decreased to 3.4%, hitting a low not seen in many years.
The improvements served as a reminder of the US labor market’s tenacity, which has endured despite vigorous attempts by the US central bank to slow the economy.
In a little more than a year, the Federal Reserve abruptly increased its benchmark interest rate from close to zero to between 5% and 5.25% in an effort to slow last year’s price increase, which was the fastest in decades.
These rises have made it more expensive to borrow money to grow a business or take on other debt, as well as to purchase a home or automobile. Theoretically, this should lessen demand, slow down the economy, and ease the pressures driving up prices.
Although job growth has slowed since last year, it is still higher than analysts believe is necessary to keep up with population growth.
The Labor Department stated in its report on Friday that hiring in February and March had been less than anticipated.
However, job growth resumed last month, and salary growth from a year ago was 4.4%.
“Today’s report clearly suggests weakening labour markets – most obviously in the downward revisions of prior months data – but from a very strong starting point,” said Ronald Temple, chief market strategist at Lazard.
Numerous academics predict that the US economy will enter a recession later this year due to significant slowdowns in important industries including housing.
There have been a lot of job cuts announced recently by major corporations, like Facebook owner Meta, Amazon, Disney, banks, and other businesses.
The banking industry has been rocked by the worst run of failures since the 2008 financial crisis, and the rate increases have also contributed to this unrest.
However, Jerome Powell, the chairman of the US central bank, expressed optimism this week that this time would be “different” and the US may escape a slump that would put millions of people out of work due to the continued strength of the labor market.
“That would be against history,” he acknowledged. “I fully appreciate that
Brian Zovko, a software engineer, lost his job in the auto business in February.
He claimed that his company had been reporting significant profits, therefore he was startled. But more lately, managers had brought up the possibility of cost reductions, stating that they were worried about the effects of increasing borrowing prices and an economic slowdown.
The Texas resident, who is 27 years old, claims he has been depending on funds and making an effort to spend sparingly. Although he felt the job market had cooled over the past few months, he said he was still certain he would soon land a new position.
“I’m mildly optimistic that I should be able to get back on track,” he said. However, he added, “it seems like there’s a decent risk the economy gets worse”.