A “Now Hiring” sign hangs in front of a Winn-Dixie grocery store in Miami. | Joe Raedle/Getty Images
By Ben White
05/06/2022 10:30 AM EDT
Updated:
05/06/2022 01:06 PM EDT
The U.S. labor market has been hot, with rising wages, low unemployment and a record number of job openings. There are almost two jobs available for everyone seeking work, and the average monthly gains of more than 400,000 during the last year exceed anything seen since 1939.
On Friday, we got a glimpse at whether that extraordinary run is holding up even as clouds loom over other parts of the economy and the Federal Reserve is planning aggressive interest rate hikes to curb inflation. The answer is yes.
The Labor Department’s employment report for April showed a gain of 428,000 jobs and unemployment remaining at a low 3.6 percent, demonstrating that the market remains remarkably strong and tilted toward job seekers. The jobless rate is close to where it was before the pandemic.
Still, the workforce remains smaller than before the pandemic ravaged the economy, shrinking again in April with 363,000 people leaving the market. And job growth numbers for February and March were revised down by a combined 39,000.
The stubbornly low percentage of Americans participating in the workforce — that figure is now 62.2 percent — highlights just how narrow the window is for the Fed, which has raised rates twice since March and will continue to do so for months with inflation at a four-decade high. The central bank has to tamp down inflation without crashing the U.S. into recession and ending the jobs boom, a danger that would take away a crucial economic talking point for President Joe Biden and Democrats in the 2022 midterms and beyond.
“Ordinarily, we’d see these kinds of job gains and see an unemployment rate where it is and we’d say, ‘Yay! Normal days are here again!’” said Beth Ann Bovino, chief U.S. economist at Standard & Poor’s. “But these aren’t normal times and the Fed clearly has to play catch-up, and that could be at the expense of the economy. The impact won’t necessarily topple the apple cart in 2022, but my worry is for 2023 once these hikes really start to add up.”
Austan Goolsbee, a professor at the University of Chicago and former top economic adviser to …