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    Unemployment rate sinks in April for Black and Hispanic workers, but holds steady for Asians

    April’s nonfarm payrolls report surpassed expectations, with 253,000 jobs added.
    The unemployment rate declined sharply for Black workers, falling to 4.7% in April. The rate also came down for Hispanics, dropping to 4.4%.
    Longer-term trends show a slight increase in the labor force participation rate for Asian American populations.

    The Good Brigade | Digitalvision | Getty Images

    The unemployment rate slipped for Black and Hispanic workers in April, but remained stable for Asian American workers.
    The U.S. unemployment rate inched down to 3.4% last month, according to the U.S. Bureau of Labor Statistics. The number not only marked a decrease from 3.5% in March, but it also tied for the lowest rate since 1969.

    Unemployment dipped sharply for Black workers, declining to 4.7% in April from 5% in the previous month. Similarly, the unemployment rate among Hispanic workers declined to 4.4% last month from 4.6%.
    For Asian American workers, the unemployment rate held steady at 2.8%, as it was in March.
    “Unemployment rates remain low across the board and historically low for Black workers,” said Valerie Wilson, director of the Economic Policy Institute’s program on race, ethnicity and the economy.
    With the overall unemployment rate under 4%, the difference in rates between racial demographic groups is also narrowing, she added.

    Unexpected drivers 

    A closer look at the labor force participation rate — a measurement of the number of people seeking work — shows an underlying factor behind the falling unemployment rate for Black workers in this latest report.

    “The Black unemployment rate fell for quirky reasons in a way,” said AFL-CIO chief economist William Spriggs. That’s because the labor force participation rate for Black workers declined in April, he said, dropping to 63% from 64.1% in March. For Black men, the rate slipped to 67.8% from 70.5%.
    When that finding is placed alongside the declining unemployment rate, it suggests there are unemployed workers who either stopped looking for a job or didn’t get one at that point in time.

    “It’s kind of a weird mixed message,” said Wilson. “But again, looking at the longer-term trend, it’s still fairly stable and steady with what we’ve seen in the last several months.”
    Longer-term trends also show a slight increase in the labor force participation rate for Asian American populations, which was 64.9% in April — the same as in March. A year ago, the participation rate for this demographic group was 64.5%. “This is also a sign of continued job growth as more people enter the labor market,” said Wilson.

    Spotting green shoots

    April’s payrolls report showed huge gains in the health care and social assistance industry — an increase of more than 64,000 jobs — while government positions swelled 23,000.
    Growth in those jobs is a positive development for women and people of color in particular, said Spriggs, as they tend to hold managerial positions in the health and public service industries.
    “The fact that those sectors are doing well and still hiring, that’s good news for issues of equity,” he said.
    — CNBC’s Gabriel Cortes contributed reporting. More

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    U.S. Employers Added 253,000 Jobs Despite Economic Worries

    Employers added 253,000 jobs in April and unemployment fell to 3.4 percent, but the labor market’s strength complicates the Fed’s inflation fight.The labor market is still defying gravity — for now.Employers added 253,000 jobs in April on a seasonally adjusted basis, the Labor Department reported Friday, in a departure from the cooling trend that had marked the first quarter and was expected to continue.The unemployment rate was 3.4 percent, down from 3.5 percent in March, and matched the level in January, which was the lowest since 1969. Wages also popped slightly, growing 4.4 percent over the past year.The higher-than-forecast job gain complicates the Federal Reserve’s potential shift toward a pause in interest rate increases. Jerome H. Powell, the Fed chair, said on Wednesday that the central bank might continue to raise rates if new data showed the economy wasn’t slowing enough to keep prices down.It’s also an indication that the failure of three banks and the resulting pullback on lending, which is expected to hit smaller businesses particularly hard, hasn’t yet hamstrung job creation.“All these things are telling us it’s not a hard stop; it’s creating a headwind, but not a debilitating headwind,” said Carl Riccadonna, the chief U.S. economist at BNP Paribas. “A gradual downturn is happening, but it sure is stubborn and persistent in the trend.” Despite the strong showing in April, the labor market continues to gently descend from blistering highs.Downward revisions to the previous two months’ data meaningfully altered the spring employment picture, subtracting a total of 149,000 jobs. That brings the three-month average to 222,000 jobs, a clear slowdown from the 400,000 added on average in 2022. Most economists expect a more marked downshift later in the year.Jobs increased across industriesChange in jobs in April 2023, by sector More

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    Here’s where the jobs are for April 2023 — in one chart

    Broad-based gains across industries helped April nonfarm payroll data top economists’ expectations.
    Almost 1 in 4 of the new jobs were in health care and social assistance, which added about 64,200 in the month.
    Professional and business services saw the second-largest growth in April at 43,000, which is more jobs than it has added in an average month over the past half-year.

    Broad job gains across the economy helped the labor market show resilience in the face of a banking crisis and growing recessionary concerns.
    Nonfarm payrolls increased by 253,000 in April, according to data from the Bureau of Labor Statistics released Friday. That’s more than the Dow Jones estimate of 180,000.

    Friday’s data bolsters the argument that the labor market has remained idiosyncratically strong despite signs that the broader economy has slowed.
    Almost 1 in 4 of the new jobs were in health care and social assistance, which added about 64,200 in the month. About 24,000 of those new jobs were in ambulatory services alone. Nursing and residential care facility payrolls rose by 9,000, while hospital payrolls increased by 7,000 from the prior month.
    Despite being the highest-growing sector compared with last month, health care still added fewer jobs than it has on average over the past six months. But the social assistance sector saw a larger increase than it has on average in that time period, helped by gains in the individual and family services sub-industry.
    Professional and business services saw the second-largest growth in April at 43,000, which is more jobs than it has added in an average month over the past half-year. Professional, scientific and technical service jobs accounted for the bulk of the sector’s gains with a 45,000 increase. But temporary service roles continued to slide with a 23,300 month-over-month loss, putting the sub-sector’s total workforce nearly 175,000 jobs off its peak in March 2022.
    “No jobs report is perfect,” said Nick Bunker, head of economic research at the Indeed Hiring Lab. “The continued decline in temporary help services employment may start tripping some traditional recession alarm bells, but given the rapid pace of hiring in recent years, it may simply be another sign of moderation.”

    April’s broad gains in some ways made up for drops seen in previous months for a handful of industries. Construction gained 15,000 jobs in April after losing 11,000 in March. Payrolls tied to financial activity jobs grew by 23,000 in April, more than erasing losses after shedding a modest 1,000 in the prior month.
    And despite the broad gains across sectors, total job growth is relatively muted. Bunker noted the three-month moving average came down to 222,000 with April’s data, which is less than half of its size a year ago. He said growth is still high enough to keep the unemployment rate steady, but those signs of moderation can show the Federal Reserve that the famously hot labor market is, in fact, showing indications of cooling.
    “Workers, employers, and policymakers should be encouraged about the current state of affairs,” Bunker said. “But it’s unclear how much longer it can endure.”
    — CNBC’s Gabriel Cortés contributed to this report. More

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    Wages Grow Steadily, Defying Fed’s Hopes as it Fights Inflation

    Wage growth ticked up in April, good news for American workers but bad news for officials at the Federal Reserve, who have been hoping to see a steady moderation in pay gains as they try to wrestle inflation back under control.Average hourly earnings climbed by 4.4 percent in the year through April. That compared with 4.3 percent in the previous month, and was more than the 4.2 percent that economists had expected.The increase in wages compared with the previous month — at 0.5 percent — was the fastest since March 2022.The hourly earnings measure can bounce around from month to month, so it is possible that the April increase is a blip rather than a reversal in the trend toward cooler wage gains. Even so, the data underscored that the Fed faces a bumpy road as it tries to slow the economy and bring inflation under control.Fed officials are closely watching the pace of wage growth as they try to assess how quickly inflation is likely to fade. While officials regularly acknowledge that wage gains did not initially cause rapid price increases, they worry that it will prove difficult to return inflation to normal with pay gains rising so rapidly.Companies may charge more in order to cover their climbing labor costs. And when households are earning more, they are more capable of keeping up with higher expenses without pulling back their spending — enabling businesses to charge more for hotel rooms, child care and restaurant meals without scaring away consumers.The Fed has raised interest rates at the fastest pace since the 1980s starting from March 2022. Officials this week lifted borrowing costs to just about 5 percent and signaled that they might pause their rate moves as soon as their June meeting, depending on incoming economic data.Jerome H. Powell, the Fed chair, noted during his news conference this week that wage growth has remained strong. He suggested the solid job market was one reason the Fed would likely keep rates high to continue slowing the economy “for a while” as it tried to wrestle inflation, which remains above 4 percent, back to the central bank’s 2 percent goal.“Right now, you have a labor market that is still extraordinarily tight,” he said, noting that a more dated wage figure released last week was “a couple percentage points above what would be consistent with 2 percent inflation over time.”That measure, the Employment Cost Index, showed that wages and salaries for private-sector U.S. workers were up 5.1 percent in March from a year earlier. While that is somewhat faster than the gain reported by the overall average hourly earnings figures for April that were released Friday, it is roughly in line with a closely-watched measure within the monthly jobs report that tracks pay gains for rank and file workers.Pay for production and nonsupervisory workers — essentially, people who are not managers — climbed by 5 percent in the year through April, Friday’s report showed. That number has continued to gradually moderate, even as the slowdown in the overall index has stalled.Fed policymakers will have another month of job and wage data in hand before they make their next interest-rate decision on June 14, making Friday’s figures just one of many factors that are likely to inform whether they pause rate increases or press ahead with more policy adjustments. Officials will also have further evidence of how much the recent turmoil in the banking sector is slowing the economy before they next meet.A series of high-profile bank failures have spooked investors and could generate caution at lenders across the country, which could make it harder to access loans for construction projects and mortgages and help to cool growth — but it is unclear so far how large that effect will be.Perhaps most importantly, officials will receive fresh inflation data before their next decision.“They’ll need to see the inflation data and digest this holistically,” said Kathy Bostjancic, chief economist at Nationwide. She said that the strong jobs numbers were just one month of data, but that they were “jarring” to see at a moment when economists had been looking for a slowdown.“Assuming that the inflation numbers continue to trend lower gradually, I think they can go on hold in June,” she said of the Fed. “But it will depend in the inflation readings.” More

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    Job growth totals 253,000 in April, beating expectations even as the U.S. economy slows

    Nonfarm payrolls increased 253,000 for April, beating Wall Street estimates for growth of 180,000.
    The unemployment rate was 3.4% against an estimate for 3.6% and tied for the lowest level since 1969.
    Average hourly earnings rose 0.5% for the month and increased 4.4% from a year ago, both higher than expected.

    Job growth fared better than expected in April despite bank turmoil and a decelerating economy, the Labor Department reported Friday.
    Nonfarm payrolls increased 253,000 for the month, beating Wall Street estimates for growth of 180,000, according to the Bureau of Labor Statistics.

    The unemployment rate was 3.4% against an estimate for 3.6% and tied for the lowest level since 1969. A more encompassing number that includes discouraged workers and those holding part-time jobs for economic reasons edged lower to 6.6%.
    Average hourly earnings, a key inflation barometer, rose 0.5% for the month, more than the 0.3% estimate. On an annual basis, wages increased 4.4%, higher than the expectation for a 4.2% gain.

    Stock market futures held their gains after the report, while Treasury yields were sharply higher.
    Professional and business services led the job gains with an increase of 43,000. That was followed by health care (40,000), leisure and hospitality (31,000), and social assistance (25,000).
    Despite serious banking industry troubles, jobs in finance increased by 23,000. Government hiring rose by 23,000.

    April’s upside surprise was offset by sharp downward revisions in previous months. March’s count was slashed to 165,000, down 71,000 from the initial estimate, while February fell to 248,000, a reduction of 78,000. Also, the household survey, which is used to calculate the unemployment rate, showed a softer total jobs gain of 139,000.
    “It is encouraging to see a strong jobs report amid recession concerns, instability in the banking sector and ongoing layoffs,” said Steve Rick, chief economist at CUNA Mutual Group. “We are hopeful the continued strength of the jobs market and signs of slowing inflation will ease market volatility in the coming months.”
    The unemployment rate tied a record low going back to May 1969. The jobless level for Blacks fell to a fresh record 4.7% and declined to 4.4% for Hispanics while holding at 2.8% for Asians. The rate for adult women was unchanged at 3.1%.
    The labor force participation rate was unchanged at 62.6% while the labor force edged lower to 166.7 million.

    Workers load packages into Amazon Rivian Electric trucks at an Amazon facility in Poway, California, November 16, 2022.
    Sandy Huffaker | Reuters

    Friday’s report comes amid persistent troubles in the banking industry, particular midsize regional institutions that have been hit by runs on deposits and worried investors who have sent share prices tumbling.
    That has come at the same time that the economy appears to be slowing toward a possible recession later in the year. Gross domestic product increased just 1.1% in the first quarter, largely on an inventory drawdown though there have been signs that consumer spending is weakening. Credit card spending, for instance, has declined 0.7% from a year ago, according to Bank of America.
    Despite the bank troubles and recession fears, the Federal Reserve this week raised its benchmark interest rate another quarter percentage point, taking it to its highest level since August 2007.
    Fed Chairman Jerome Powell acknowledged that higher interest rates were pressuring households, though he noted that the labor market has remained strong. He added that the economy “is likely to face further headwinds from tighter credit conditions.”
    The central bank is striving to get inflation down to a 2% annual level, though it is well above that now. One measure, the consumer price index, shows inflation running at a 5% annual pace.
    Rising wages have helped pressure prices. Powell said a 3% annual wage gain is probably consistent with the Fed’s 2% mandate. More

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    What Options Biden Has in the Debt Limit Crisis

    The president has not wavered in his calls for Republicans to raise the nation’s borrowing limit without condition. Privately, his aides have discussed other paths.The federal government has perhaps less than a month left before an economically devastating default on its debt.No matter who bears the political blame for a default, aides acknowledge that President Biden has a lot to lose if the nation tips into recession just as he is moving into his re-election campaign.Mr. Biden has several strategic options as he tries to prevent that from happening. All have been the subject of discussions inside the administration and with Democratic allies in recent weeks. They range from continuing to hold out for Republicans to raise the nation’s debt limit with no strings attached to preparing unilateral action to effectively bypass the limit and keep paying the nation’s bills.Some involve negotiations with Republican leaders, which Mr. Biden will insist are not related to the debt limit even though they would be.Each path carries risks, which administration officials acknowledge privately. The biggest by far is economic calamity: White House economists warned in an analysis released on Wednesday that if the country defaulted on its debt and that default continued for several months, the economy would shed eight million jobs as it entered recession.The economists also warned that merely approaching a possible default would rattle markets and drive up borrowing costs across the economy, “inhibiting firms’ ability to finance themselves and engage in the productive investment that is essential for extending the current expansion.”Here are the paths available to Mr. Biden, as his aides and allies see them.Stay the courseMr. Biden has insisted for months that lawmakers must raise the nation’s borrowing cap with no conditions attached, saying that it simply allows the United States to pay for spending Congress has already authorized. He could continue to do so, refusing to negotiate, as many progressives have urged him to do.It would be an attempt to stare down House Republicans, who last week passed a bill pairing an increase in the limit with cuts to federal spending and a reversal of Mr. Biden’s climate agenda. Mr. Biden would effectively be daring Speaker Kevin McCarthy of California to allow the government to run out of cash to pay its bills on time, which the Treasury Department estimates could happen as soon as June 1.The risk is that Mr. McCarthy refuses to give in, pointing to the House bill as evidence that Republicans had done enough to raise the debt limit. Mr. Biden would count on pressure from business groups and turmoil in financial markets to push Republicans to blink at the last moment and at least pass a bill to avoid default for a few weeks or months. But as of now, House Republicans have shown no willingness to pass such a bill, known as a “clean” debt-limit increase. Neither have a critical mass of Senate Republicans needed to advance the bill in that chamber.Shalanda Young, the White House budget director, said, “I have hope that we will find a path to avoid default.”Pete Marovich for The New York TimesNegotiate spending cuts not tied to the debt limitMr. Biden will welcome Mr. McCarthy and other congressional leaders to the White House next week for talks about fiscal policy — how much the nation taxes, spends and borrows. The president says those talks are divorced from the debt limit, but effectively, they are not.The deadline hanging over the talks is the so-called X-date, estimated for June 1; Mr. Biden’s invitation to congressional leaders was accelerated by the revised projections of when that date will hit. In contrast, the bill funding federal government operations, which Mr. Biden signed late last year, runs through the end of September.Mr. Biden could negotiate without “negotiating” by trying to broker an early agreement on spending levels for the next fiscal year, before the X-date. In exchange, Mr. McCarthy would commit to passing a clean extension of the debt limit.Business groups and even some administration officials expect any deal of that nature to center on limits on federal discretionary spending — though almost certainly not as stringent as the ones in the bill Republicans have passed. White House officials have said privately for months that they do not expect the House to approve significant spending increases for next year anyway, so some sort of limits may prove palatable to Mr. Biden, depending on the details.The risk of that strategy is that Mr. McCarthy’s most conservative members have shown no appetite for a deal of that scope. Mr. Biden will not accept those members’ more sweeping demands. That complicates the prospects for an agreement that runs through the speaker.Speaker Kevin McCarthy pointed to the bill the House passed last week as evidence that Republicans had done enough to raise the debt limit.Kenny Holston/The New York TimesBypass McCarthyMr. Biden could try to bypass the speaker and court a handful of moderate Republicans in the House and the Senate to vote to raise the limit, offering some fiscal concessions as an enticement. Bringing such a deal to the House floor could require some legislative maneuvering, like the so-called discharge petition Democrats have been keeping at the ready for months.It could also require a different approach from Mr. Biden to the congressional Republicans he needs to pass such a bill. Moderate Republicans in the House say they are receiving little friendly outreach from the White House so far. Instead, Biden administration officials have gleefully hammered them for voting to advance the Republican debt-limit bill and its deep spending cuts.This week administration officials have posted, again and again, the headshots and names of House Republicans on Mr. Biden’s official Twitter account, accusing them of voting to cut funding to veterans’ programs and Meals on Wheels. Two of the featured lawmakers were members of leadership, including Mr. McCarthy. Two others were high-profile, far-right congresswomen. The remainder — more than two dozen — were lawmakers in seats Mr. Biden won in 2020.Officials have defended that strategy. “I have hope that we will find a path to avoid default,” Shalanda Young, the White House budget director, told reporters on Thursday, after assailing budget cuts included in the Republican bill. “But it’s our job to keep coming to you, to go to the American people, and make sure people understand what this debate is about.”Go it aloneIf Mr. Biden’s chosen tactics do not produce a bill he will sign that raises the debt limit before the X-date, the president will have to choose between allowing the nation to default or pursuing what is effectively a constitutional challenge to the debt ceiling by continuing to borrow to pay the bills when the government runs out of cash.That challenge would be rooted in a clause in the 14th Amendment that stipulates that the government must pay its debts. Administration officials have debated that idea, with no resolution, for months. But even its proponents concede that it would not be a perfect solution. The move would draw an immediate court challenge and sow at least temporary uncertainty in the bond market, sending government borrowing costs soaring.Catie Edmondson More

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    Powell Bets the Fed Can Slow Inflation Despite Recession Fears

    Jerome H. Powell, the Federal Reserve chair, thinks his central bank can defy history to clinch slower inflation and a soft economic landing.The Federal Reserve’s push to slow the economy and bring inflation under control is often compared to an airplane descent, one that could end in a soft landing, a bumpy one or an outright crash.Jerome H. Powell, the Fed chair, is betting on something more akin to the Miracle on the Hudson: a touchdown that is gentle, all things considered, and unlike anything the nation has seen before.The Fed has raised rates sharply over the past year, pushing them just above 5 percent on Wednesday, in a bid to cool the economy to bring inflation under control. Staff economists at the central bank have begun to forecast that America is likely to tip into a recession later this year as the Fed’s substantial policy moves combine with turmoil in the banking sector to snuff out growth.But Mr. Powell made it clear during a news conference on Wednesday that he does not agree.“That’s not my own most likely case,” he said, explaining that he expects modest growth this year. That sunnier forecast has hinged, in part, on trends in the labor market.America’s job market is still very strong — with rapid job growth and unemployment hovering near a 50-year low — but it has shown signs of cooling. Job openings have dropped sharply in recent months, falling to 9.6 million in March from a peak of more than 12 million a year earlier. Historically, such a massive decline in the number of available positions would have come alongside layoffs and rising joblessness, and prominent economists had predicted a painful economic landing for exactly that reason.But so far, unemployment has not budged.Relationship Status: It’s ComplicatedJoblessness usually increases when job openings fall. But that relationship is in question now as job openings drop while unemployment remains low.

    Note: Data is seasonally adjustedSource: Bureau of Labor StatisticsBy The New York Times“It wasn’t supposed to be possible for job openings to decline by as much as they have declined without unemployment going up,” Mr. Powell said this week. While America will get the latest update on unemployment when a job market report is released Friday, unemployment has yet to rise meaningfully. Mr. Powell added that “there are no promises in this, but it just seems to me that it is possible that we can continue to have a cooling in the labor market without having the big increases in unemployment that have gone with many prior episodes.”America’s economic fate rests on whether Mr. Powell’s optimism is correct. If the Fed can pull it off — defying history to wrangle rapid inflation by sharply cooling the labor market without causing a big and painful jump in joblessness — the legacy of the post-pandemic economy could be a tumultuous but ultimately positive one. If it can’t, taming price increases could come at a painful cost to America’s employees.The Fed has raised rates sharply over the past year, pushing them just above 5 percent as of their meeting this week, in a bid to cool the economy in order to wrestle inflation under control.Hiroko Masuike/The New York TimesSome economists are skeptical that the good times can last.“We haven’t seen this trade-off, which is fantastic,” said Aysegul Sahin, an economist at the University of Texas at Austin. But she noted that productivity data appeared glum, which suggests that companies got burned by years of pandemic labor shortages and are now hanging onto workers even when they do not necessarily need them to produce goods and services.“This time was different, but now we are getting back to the state where it is a more normal labor market,” she said. “This is going to start playing out the way it always plays out.”The Fed is in charge of fostering both maximum employment and stable inflation. But those goals can come into conflict, as is the case now.Inflation has been running above the Fed’s 2 percent goal for two full years. While the strong labor market did not initially cause the price spikes, it could help to perpetuate them. Employers are paying higher wages to try to hang onto workers. As they do that, they are raising prices to cover their costs. Workers who are earning a bit more are able to afford rising rents, child care costs and restaurant checks without pulling back.In situations like this, the Fed raises interest rates to cool the economy and job market. Higher borrowing costs slow down the housing market, discourage big consumer purchases like cars and home improvement projects, and deter businesses from expanding. As people spend less, companies cannot keep raising prices without losing customers.But setting policy correctly is an economic tightrope act.Policymakers think that it is paramount to act decisively enough to quickly bring inflation under control — if it is allowed to persist too long, families and businesses could come to expect steadily rising prices. They might then adjust their behavior, asking for bigger raises and normalizing regular price increases. That would make inflation even harder to stamp out.On the other hand, officials do not want to cool the economy too much, causing a painful recession that proves more punishing than was necessary to return inflation to normal.Striking that balance is a dicey proposition. It is not clear exactly how much the economy needs to slow to fully control inflation. And the Fed’s interest rate policy is blunt, imprecise and takes time to work: It is hard to guess how much the increases so far will ultimately weigh on growth.That is why the Fed has slowed its policy changes in recent months — and why it appears poised to pause them altogether. After a string of three-quarter point rate moves last year, the Fed has recently adjusted borrowing costs a quarter point at a time. Officials signaled this week that they could stop raising rates altogether as soon as their mid-June meeting, depending on incoming economic data.Hitting pause would give central bankers a chance to see whether their rate adjustments so far might be sufficient.It would also give them time to assess the fallout from turmoil in the banking industry — upheaval that could make a soft economic landing even more difficult.Three large banks have collapsed and required government intervention since mid-March, and jitters continue to course through midsize lenders, with several regional bank stocks plummeting on Wednesday and Thursday. Banking troubles can quickly translate into economic problems as lenders pull back, leaving businesses less able to grow and families less able to finance their consumption.The labor market could be in for a more dramatic slowdown, given the bank tumult and the Fed’s rate moves so far, said Nick Bunker, the director of North American economic research at the job site Indeed.He said that while job openings have been coming down swiftly, some of that might reflect a shift back to normal conditions after a bout of pandemic-inspired weirdness, not necessarily as a result of Fed policy.For instance, job openings in leisure and hospitality industries had spiked as restaurants and hotels reopened from lockdowns. Those were now disappearing, but that might be more about a return to business as usual.“A soft landing is happening, but how much of that is gravity and how much of it is what the pilot is doing with the plane?” Mr. Bunker said. Going forward, it could be that the normal historical relationship between declining job openings and rising joblessness will kick in as policy begins to bite.Or this time truly could be unique — as Mr. Powell is hoping. But whether the Fed and the American economy get to test his thesis could depend on whether the banking system issues clear up, Mr. Bunker said.“We might not get the answer if the financial sector comes and tips the table over,” he said. More

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    Private payrolls surged by 296,000 in April, much higher than expected, ADP says

    Private payrolls rose by 296,000 for April, above the downwardly revised 142,000 the previous month and well ahead of the estimate for 133,000.
    The fastest job growth in April came in leisure and hospitality with a gain of 154,000, followed by education and health services (69,000) and construction (53,000).
    The financial sector lost 28,000 jobs for the month. Manufacturing also took a hit, losing 38,000 jobs.

    A “now hiring” sign is displayed outside Taylor Party and Equipment Rentals in Somerville, Massachusetts, U.S., September 1, 2022. 
    Brian Snyder | Reuters

    Hiring at private companies unexpectedly swelled in April, countering expectations for a cooling job market ahead, payroll processing firm ADP reported Wednesday.
    Private payrolls rose by 296,000 for the month, above the downwardly revised 142,000 the previous month and well ahead of the Dow Jones estimate for 133,000. The gain was the highest monthly increase since July 2022.

    The surge comes despite Federal Reserve efforts to slow economic growth and in particular to tame a powerful labor market that has added more than 800,000 jobs this year by ADP’s count. An imbalance of demand over supply in the labor market has created strong wage gains that are reflected in persistent inflation pressures.
    One positive sign for the Fed is that annual pay rose 6.7% over the past year, a deceleration from gains that had been consistently coming in above 7%.
    “The slowdown in pay growth gives the clearest signal of what’s going on in the labor market right now,” ADP’s chief economist, Nela Richardson, said. “Employers are hiring aggressively while holding pay gains in check as workers come off the sidelines.”
    The firm’s report serves as a precursor to the Labor Department’s more closely watched nonfarm payrolls count due out Friday. Economists surveyed by Dow Jones expect that data to show an increase of 180,000 following March’s 236,000. The two reports often differ, sometimes by large margins.
    According to ADP, the fastest job growth in April came in leisure and hospitality with a gain of 154,000, followed by education and health services (69,000), and construction (53,000). Other sectors posting solid increases included natural resources and mining, with 52,000, and trade, transportation and utilities, which added 32,000.

    The financial sector, beset by deposit runs that have led to the closure of three regional banks, lost 28,000 jobs for the month. Manufacturing also took a hit, down 38,000 jobs, as the sector has been in contraction for the past six months.
    Job gains were fairly evenly distributed across company size, with firms employing fewer than 500 employees contributing 243,000 to the total. More