Despite bank turbulence and a slowing economy, job growth performed better than anticipated in April, the Labour Department announced on Friday.
According to the Bureau of Labour Statistics, nonfarm payrolls rose by 253,000 for the month, exceeding Wall Street expectations for growth of 180,000.
In contrast to expectations, the unemployment rate was 3.4%, which was matched for the lowest level since 1969. A more comprehensive figure that accounts for discouraged workers and people who work part-time employment because of the economy decreased slightly to 6.6%.
An important inflation indicator, average hourly pay, increased by 0.5% for the month, above the 0.3% projection and representing the largest monthly growth in a year. Wages climbed annually by 4.4%, exceeding the forecasted growth of 4.2%.?
Both numbers raise the chances that the Federal Reserve could decide to raise interest rates again in June, though markets were only pricing in a small probability following the jobs report.
Wall Street opened sharply higher?following the jobs news, with the?Dow Jones Industrial Average?gaining nearly 400 points, while Treasury yields jumped as well. The move higher followed a strong earnings report from Apple and a powerful rebound in banking stocks.
"It is encouraging to see a strong jobs report amid recession concerns, instability in the banking sector and ongoing layoffs," said Steve Rick, chief economist at CUNA Mutual Group. "We are hopeful the continued strength of the jobs market and signs of slowing inflation will ease market volatility in the coming months."
Despite the bank troubles and recession fears, the Federal Reserve this week raised its benchmark interest rate another quarter percentage point, taking it to its highest level since August 2007.
Fed Chairman Jerome Powell acknowledged that higher interest rates were pressuring households, though he noted that the labor market has remained strong. He added that the economy "is likely to face further headwinds from tighter credit conditions."
The central bank is striving to get inflation down to a 2% annual level, though it is well above that now. One measure, the consumer price index, shows inflation running at a 5% annual pace.
Rising wages have helped pressure prices. Powell said a 3% annual wage gain is probably consistent with the Fed's 2% mandate.
