Despite the turmoil in the banking sector and the impact of higher borrowing costs, job creation remained robust in the United States last month.
Employers added 253,000 positions, exceeding the expectations of many analysts.
The unemployment rate returned to a multi-decade low of 3.4%.
The gains served as a reminder of the US labor market’s resilience in the face of aggressive efforts by the US central bank to chill the economy.
In a little over a year, the Federal Reserve raised its benchmark interest rate from near zero to between 5% and 5.25 percent, a sudden shift intended to curtail prices that rose at the fastest rate in decades last year.
These increases have substantially increased the cost of purchasing a residence or automobile, as well as the cost of borrowing to expand a business or incurring other debt. Theoretically, this should reduce demand, decelerate the economy, and alleviate the price pressures.
Job growth has slowed since last year, but it still exceeds economists’ estimates for population increase.
In its report released on Friday, the Labour Department stated that employment in February and March was weaker than previously estimated.
But job creation accelerated again last month, while wages rose 4.4% year-over-year.
“Today’s report indicates that labor markets are weakening, as evidenced by the downward revisions of prior months’ data,” said Ronald Temple, chief market strategist at Lazard. “However, the labor market started very strong,” he added.
Numerous economists anticipate that the US economy will enter a recession later this year, citing significant slowdowns in key sectors such as the housing market.
The past few weeks have witnessed a flurry of layoff announcements by major corporations such as Facebook owner Meta, Amazon, entertainment behemoth Disney, and banks.
The rate hikes also contributed to the banking sector’s turmoil, which has been rocked by the most severe series of failures since the 2008 financial crisis.
Jerome Powell, the head of the US central bank, stated this week that the continued strength of the labor market gave him confidence that this time would be “different” and the United States could avoid a recession that would cause millions of people to lose their jobs.
“That would be against the course of history,” he conceded. “I fully appreciate that.”
In February, software engineer Brian Zovko was laid off from his position in the automobile industry.
He expressed astonishment because his company had been generating substantial profits. More recently, however, executives had proposed expense reductions, citing their concern over the impact of higher borrowing costs and a slowing economy.
The 27-year-old Texan states that he has been relying on savings and attempting to spend prudently. He reported sensing a slowdown in the employment market over the past few months but remained optimistic that he would soon find a new position.
“I’m cautiously optimistic that I can get back on track,” he said. However, he noted, “There appears to be a reasonable possibility that the economy will worsen.”
