MAY 9 – The US economy created 115,000 jobs in April as businesses kept hiring despite the economic fallout from the US-Israel war in Iran.
The increase was stronger than expected, with the total almost twice as much as economists had forecast.
The data, published by the US Bureau of Labor Statistics (BLS), also showed the unemployment rate was unchanged at 4.3%.
The closure of the Strait of Hormuz in response to US and Israeli strikes on Iran has sparked a global energy shock, pushing up the price of gasoline for American consumers.
The latest figures come after months of big fluctuations in job numbers. Non-farm payrolls fell by 156,000 in February before rising by 185,000 in March.
April’s solid employment figures added to expectations the Federal Reserve will keep interest rates on hold as it seeks to keep a lid on inflation.
Revisions to March and February’s figures mean the number of jobs rose on average by 48,000 over the last three months.
That is in line with the so-called breakeven rate, the level of job creation at which new people entering the workforce can be absorbed.
The better-than-expected jobs figures helped to lift the major US stock indexes. The S&P 500 rose by 0.8% and the Dow Jones Industrial Average closed flat.
Economists said the figures were encouraging, pointing to a particularly strong showing in the retail and transportation and warehousing sectors.
“Both give relatively positive signals about the health of discretionary spending, despite the hit to consumers’ purchasing power from higher gasoline prices,” said Thomas Ryan, North America economist at Capital Economics.
But he pointed to “mixed signals” elsewhere in the report, including slow wage growth and an overall contraction in the jobs market, with fewer working-age people seeking employment.
“All that being said, this was ultimately a positive employment report that reinforces the view that the labour market is stable and potentially even accelerating,” he said.
But Samuel Tombs, chief US economist at Pantheon Macroeconomics, said job growth was likely to start to slow in the coming months.
He said recent survey data pointed to a slowdown in hiring and that the unemployment rate could rise from 4.3% to 4.7% by the end of the year, prompting the Federal Reserve to begin cutting interest rates from December.
The White House said April’s job figures were “another sign that the American economy remains on a solid trajectory under President Trump”.
“Every leading indicator is pointed in the right direction, and Americans can rest assured that the best is yet to come,” White House spokesman Kush Desai said.
By BBC
