A MARTÍNEZ, HOST:
There are a lot of speed bumps in the path of the U.S. economy right now. Inflation for one, rising interest rates two. Also add that - the recent turmoil in the banking system, and yet the job market is holding up well. The Labor Department said this morning that U.S. employers added 253,000 jobs in April. That's more than the month before and more than most forecasters were expecting. NPR's Scott Horsley is here with all the details.
Scott, doesn't seem like the job market's slowing down. So what's going on?
SCOTT HORSLEY, BYLINE: Yeah, it sure doesn't. Keep in mind, we've added a huge number of jobs over the last three years. And after a blockbuster month of hiring in January, we did see some slowdown in February and March. Now, though, it looks like the job market got a second wind in April. Even construction companies and factories managed to add a few jobs last month, despite the pinch of rising interest rates. And service industries keep adding a lot of jobs. Julia Pollak, who's chief economist for the job search website ZipRecruiter, says that's thanks to robust demand for things like travel and eating out.
JULIA POLLAK: Strong hiring for airlines and hotels and restaurants is largely offsetting the weakness elsewhere.
HORSLEY: The unemployment rate dipped last month to just 3.4%. That matches the lowest level since 1969. And unemployment among African Americans fell to 4.7%, which is a new record low. Despite all this good news, there are some signs of cooling in the job market. Job openings have been coming down. Layoffs have been inching up. And those job gains for February and March were revised down this morning by a total of 149,000.
MARTÍNEZ: Are employers still seeing a lot of turnover?
HORSLEY: Some, but not as much as they had been. The number of people quitting jobs voluntarily has come down a bit, which could be a sign that workers are less confident about finding a new job if they quit, or maybe they just don't want to be the newest hire at a company if they think there might be layoffs on the horizon. There was also some discouraging news in this morning's report. In the first three months of the year, we saw a big influx of new and returning workers, people coming off the sidelines and looking for jobs. Some of those gains were reversed last month when 43,000 people dropped out of the job market. Wage growth also picked up a bit. Average wages were 4.4% higher in April than a year ago. Bigger wage gains are good for workers, of course, but they don't help the Federal Reserve in its battle against inflation.
MARTÍNEZ: The recent banking system fallout, Scott - how does that affect the jobs picture?
HORSLEY: It's definitely something to keep an eye on. We've now had three big banks fail in the last two months, and that's making other lenders nervous. As a result, they're expected to be more cautious about making loans. We were seeing some tightening of credit conditions even before Silicon Valley Bank went under in March, and it's certainly accelerated since then. Pollak says it might take a few months, but that cutback in credit is likely to have ripple effects in the job market.
POLLAK: If small businesses can't borrow, they won't be able to open new locations, to add new equipment. So we could see a pullback in small business hiring.
HORSLEY: You know, the credit crunch acts a little bit like an extra hike in interest rate from the Federal Reserves. It slows the economy down. Unlike the Fed's move, though, which is calibrated and deliberate, the credit crunch is unplanned and unpredictable. So we'll be watching to see, you know, whether the effect on the job market is a smooth, gradual slowdown or something more abrupt and jarring. But certainly for the moment, it seems like the job market is pretty resilient.
MARTÍNEZ: NPR's Scott Horsley.
Scott, thanks.
HORSLEY: You're very welcome. Transcript provided by NPR, Copyright NPR.
