The U.S. job market continues to defy efforts to cool the economy as the unemployment rate reached 3.4% in April, tying its lowest mark in the last five decades, according to new data released by the Bureau of Labor Statistics.
The unemployment rate has hovered between 3.4% and 3.7% since last March. Employment increased by 253,000 in April, and 182,000 fewer Americans collected unemployment as compared to March.
Average hourly earnings also increased by 16 cents in April to $33.36 per hour. Average earnings have increased by roughly 4.4% in the last year, but haven’t quite kept up with inflation, which stood at 5% as of March.
Unemployment and job growth are factors the Federal Reserve considers when deciding to raise interest rates. Raising interest rates generally causes the economy to cool, meaning job losses are expected.
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Interest rates went up again Wednesday, but economists are warning that as rates go up, banks' vulnerability also increases.
Federal Reserve Chair Jerome Powell said interest rates are continuing to go up as the Fed tries to push interest rates to a normalized 2% annual growth. Powell last announced another interest rate earlier this week.
“My colleagues and I understand the hardship that high inflation is causing, and we remain strongly committed to bringing inflation back down to our 2% goal,” Powell said earlier this week. “Price stability is the responsibility of the Federal Reserve; without price stability, the economy does not work for anyone. Without price stability, we will not achieve a strong market and labor conditions that will benefit all."
Powell has indicated that the rising cost of labor would need to subside in order for inflation to reach 2%.
Although most industries have remained stable over the last year, the hospitality industry has seen the largest gains with over 900,000 added workers from a year ago.
