The U.S. job market continues to defy efforts to cool the economy as the unemployment rate reached 3.4% in April, tying its lowest mark in the last five decades, according to new data released by the Bureau of Labor Statistics.
The unemployment rate has hovered between 3.4% and 3.7% since last March. Employment increased by 253,000 in April, and 182,000 fewer Americans collected unemployment as compared to March.
Average hourly earnings also increased by 16 cents in April to $33.36 per hour. Average earnings have increased by roughly 4.4% in the last year, but haven’t quite kept up with inflation, which stood at 5% as of March.
Unemployment and job growth are factors the Federal Reserve considers when deciding to raise interest rates. Raising interest rates generally causes the economy to cool, meaning job losses are expected.
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Federal Reserve Chair Jerome Powell said interest rates are continuing to go up as the Fed tries to push interest rates to a normalized 2% annual growth. Powell last announced another interest rate earlier this week.
“My colleagues and I understand the hardship that high inflation is causing, and we remain strongly committed to bringing inflation back down to our 2% goal,” Powell said earlier this week. “Price stability is the responsibility of the Federal Reserve; without price stability, the economy does not work for anyone. Without price stability, we will not achieve a strong market and labor conditions that will benefit all."
Powell has indicated that the rising cost of labor would need to subside in order for inflation to reach 2%.
Although most industries have remained stable over the last year, the hospitality industry has seen the largest gains with over 900,000 added workers from a year ago.
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