Still Overheating: The U.S. Economy Added 253,000 Jobs in April, Unemployment Dipped to 3.4%

The U.S. economy added 253,000 jobs in April and the unemployment rate fell to 3.4 percent, the Labor Department said Friday.

Economists had forecast employers would grow payrolls by 178,000, a downturn from the preliminary March estimate of 236,000. The unemployment rate was expected to pick up to 3.6 percent from 3.5 percent.

The March estimate was revised down to 165,000.

The labor market has been stronger than expected for several months, defying expectations that interest rate increases would push unemployment up. The Federal Reserve has been trying to cool off demand for workers as part of its efforts to bring inflation back down to its two percent target. On Wednesday, the Fed raised its benchmark interest rate to a range of five percent to 5.25 percent and signaled it could pause rate hikes at subsequent meetings.

The Labor Department’s Job Opening and Labor Turnover Survey, knowns as Jolts, showed that there were 9.590 million job openings at the end of March, down from 9.974 million and 10.5643 million in the two prior months. Fed chairman Jerome Powell said at a press conference on Wednesday that the decline in job openings unaccompanied by a rise in unemployment held out the possibility that the central bank could bring down inflation without a serious rise in joblessness.

Initial jobless claims for the week that ended last Wednesday came in at 242,000, above the consensus expectation for 238,000. Continuing claims, however, declined. Initial claims, which are a proxy for layoffs, coming in below 250,000 is considered an indicator of a robust demand for workers, a level consistent with the normal churn of the economy rather than a downturn.

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