STORY: The U.S. economy added 428,000 jobs last month, a more than expected increase fueled by strong hiring in manufacturing and at bars and restaurants, showing signs of a return to normal.
April marked the 12th straight month of job gains in excess of 400,000, and showed that employment is now 1.2 million jobs below the level before the global health crisis.
But the Labor Department's closely watched jobs report on Friday also showed a moderation in wage gains last month.
And the stream of people rejoining the labor force virtually dried up, with about 363,000 exiting in April, resulting in an unchanged unemployment rate of 3.6%.
John Leer is chief economist at Morning Consult.
"One of the things that continues to be disappointing is that we don't see workers who are on the sidelines not working, not looking for work, coming back in, the so-called labor force participation rate. That remains low. And in fact, it fell a little bit this month, as did the employment to population ratio. So, while we have a really robust jobs market, it's... it's... there's something preventing people who are on the sidelines who used to be working pre-pandemic from coming back in and taking a job. And that's going to be a really significant obstacle going forward, because what it means is that the labor... the supply of labor remains constrained. And that, in turn, is going to put upward pressure on wages and ultimately upward pressure on prices. We are already operating in a world of elevated inflation. And so, you know, anything we can do to sort of ease supply constraints, labor supply constraints would go a long way right now, and we're just not seeing that happening."
On Wednesday, the Federal Reserve raised interest rates by half a percentage point, the biggest hike in 22 years, as it works to bring down inflation without tipping the economy into recession.
"The labor market is extremely tight."
Fed Chair Jerome Powell cited the record number of job openings compared to the number of unemployed workers as a reason for tightening monetary policy.
U.S. stocks opened sharply lower following Friday's jobs report extending a recent rout, but had regained some ground by midday, while U.S. Treasury yields were largely higher.