Evelyn Reynolds

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    Financial Stability Experts at the Fed Turn a Wary Eye on Commercial Real Estate

    A financial stability report from the Federal Reserve flagged concerns tied to rising interest rates, including in commercial real estate.Federal Reserve financial stability experts are on the lookout for weaknesses after a year of rising interest rates — and as they survey the potential risks confronting the system, they are increasingly watching office loans and other commercial real estate borrowing.Fed officials have lifted borrowing costs rapidly over the past year — to just above 5 percent from near-zero in early 2022 — to cool rapid inflation by slowing the economy. So far, the fallout from that abrupt change has been most obvious in the banking sector. A series of high-profile banks have collapsed or faced turmoil in recent weeks partly because they were poorly prepared for heftier borrowing costs.But Fed staff members and market experts whom they survey cited commercial real estate as another area worth watching in the central bank’s twice-annual Financial Stability Report, which was released Monday.The jump in interest rates over the past year “increases the risk” that commercial borrowers will not be able to refinance their loans when the loans reach the end of their term, Fed staff wrote in the report, noting that commercial real estate values remain “elevated.”“The magnitude of a correction in property values could be sizable and therefore could lead to credit losses by holders of C.R.E. debt,” the report said — noting that many of those holders are banks, and particularly smaller banks.“The Federal Reserve has increased monitoring of the performance of C.R.E. loans and expanded examination procedures for banks with significant C.R.E. concentration risk,” the report said.The Fed’s comments on commercial real estate amounted to muted watchfulness rather than a full-throated warning — but they come at a time when many investors and economists are closely monitoring the sector. The outlook for office buildings in downtown areas, where workers have not fully returned after a shift to remote work that began during the coronavirus pandemic, has emerged as a particular concern on Wall Street.The report included a survey of 25 professionals at broker-dealers, investment funds, research and advisory organizations, and universities, and those respondents ranked commercial real estate as their fourth-biggest financial stability concern — behind risks from interest rate increases, banking sector stress, and U.S.-China tensions, but ahead of Russia’s war in Ukraine and an impending fight in Congress about raising the debt limit.“Many contacts saw real estate as a possible trigger for systemic risk, particularly in the commercial sector, where respondents highlighted concerns over higher interest rates, valuations and shifts in end-user demand,” the report said.The Fed’s stability report also focused on risks to the economy that might come from the recent banking sector turmoil, which many officials are worried might prompt banks to pull back when it comes to lending. A Fed survey of bank loan officers released on Monday showed that demand for many types of loans has fallen in recent months, and it is becoming gradually harder to borrow.Worries could “lead banks and other financial institutions to further contract the supply of credit to the economy,” the Fed report said. “A sharp contraction in the availability of credit would drive up the cost of funding for businesses and households, potentially resulting in a slowdown in economic activity.”And if banks pull back in a dramatic way, it could have knock-on effects, the Fed report warned.“With a decline in profits of nonfinancial businesses, financial stress and defaults at some firms could increase,” the report said, especially because companies are very indebted — which puts them on dicier footing if business goes badly. More

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    Fed report shows banks worried about conditions ahead, with focus on slowing economy and deposit outflows

    Tumult in mid-sized institutions caused banks to tighten lending standards both to households and businesses, potentially posing a threat to U.S. economic growth, according to a Federal Reserve report Monday.
    The Fed’s quarterly Senior Loan Officer Opinion survey said requirements got tougher for commercial and industrial loans as well as for many household-debt instruments such as mortgages, home equity lines of credit and credit cards.

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    The loan officers further said they expect troubles to persist over the next year, owing largely to diminished expectations for economic growth as well as fears over deposit outflows and reduced risk tolerance.
    Asked their expectations for the next year, respondents gave a fairly gloomy outlook of what’s ahead.
    “Banks reported expecting to tighten standards across all loan categories,” the report said. “Banks most frequently cited an expected deterioration in the credit quality of their loan portfolios and in customers’ collateral values, a reduction in risk tolerance, and concerns about bank funding costs, bank liquidity position, and deposit outflows as reasons for expecting to tighten lending standards over the rest of 2023.”
    At the same time, the survey showed that demand weakened across most categories.
    In particular, the report showed “tighter standards and weaker demand” for commercial and industrial loans, an important bellwether for economic growth. Those conditions were seen across all business sizes.

    Also, the report showed the same conditions across commercial real estate categories.
    “There has been an ongoing tightening of lending conditions. And that is part of part of the process by which monetary policy works,” Treasury Secretary Janet Yellen told CNBC’s Sarah Eisen in response to a question about the report in a Monday “Closing Bell” interview. “The Fed is aware that tightening of credit conditions is something that will tend to slow the economy somewhat. And I believe they are taking this into account in deciding on appropriate policy.”
    The survey was being closely watched on Wall Street to gauge the fallout from troubles in the banking industry that accelerated in early March.
    That’s when regulators shuttered Silicon Valley Bank and Signature Bank following a run on deposits spurred by a loss of confidence that the institutions would have the liquidity to meet their obligations.
    Since then, JPMorgan has taken over First Republic Bank following similar troubles at that firm, and UBS bought rival Credit Suisse after the latter needed rescuing.
    Even with the banking troubles, the central bank last week decided to raise interest rates for the 10th time since March 2022. Policymakers already had seen the SLOOS report before their meeting concluded Wednesday, and Fed Chair Jerome Powell said conditions are about as expected considering what has happened in the sector.
    “The SLOOS is broadly consistent when you see it with how we and others have been thinking about the situation and what we’re seeing from other sources,” Powell told reporters. “Banking data will show that lending has continued to grow, but the pace has been slowing really since the second half of last year.”
    At the March meeting, the Fed’s own economists warned that a shallow recession was likely later in the year because of the tightening standards resulting from the banking problems. More

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    Outlook for household spending slumped in April, New York Fed survey shows

    The Survey of Consumer Expectations for April showed that the outlook for spending fell by half a percentage point to an annual rate of 5.2%, the lowest since September 2021.
    Respondents expect an inflation rate of about 4.4% in the next 12 months, down half a percentage point from March.

    People walk in front of a store along the Magnificent Mile shopping district on March 15, 2023 in Chicago, Illinois.
    Scott Olson | Getty Images

    Household spending is expected to decrease significantly over the next year, according to a New York Federal Reserve survey released Monday that reflects downbeat consumer sentiment as well as a potential slowdown for inflation.
    The central bank Survey of Consumer Expectations for April showed that the outlook for spending fell by half a percentage point to an annual rate of 5.2%, the lowest level since September 2021.

    That came with a corresponding decline of 0.3 percentage point in the overall outlook for inflation over the next year. Respondents expect an inflation rate of about 4.4% in the next 12 months, still well above the three-year outlook for 2.9% and the five-year view of 2.6%.
    All of those levels are still above the Fed’s 2% inflation target, though they are drifting closer to the goal.
    The survey’s results come less than a week after the Fed approved its 10th consecutive interest rate hike since March 2022. That took the benchmark fed funds rate to a target range of 5% to 5.25%, the highest level since August 2007.
    Along with the rate hike, Fed officials hinted that this month’s increase could be the last for a while as they assess the impact of all the preceding monetary policy tightening.
    Consumers expect to see gas prices climb by 5.1% over the next year, a half-point increase from the March survey. Food prices are projected to rise by 5.8%, a 0.1 percentage point decline from the previous month. The outlook for college costs dropped sharply, falling to an expected increase of 7.8% that was 1.1 percentage points lower than March.

    The median outlook for earnings growth was unchanged at 3%, though the employment outlook worsened. The likelihood that the unemployment rate will be higher a year from now increased to 41.8%, a 1.1 percentage point increase. The jobless rate for April fell Friday to 3.4%, tied for the lowest since May 1969.
    Elsewhere in the survey, the one-year outlook for home price appreciation rose to 2.5%, the highest since July 2022 and a 0.7 percentage point increase from March. More

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    In Debt Limit Talks, Biden and Republicans Start Far Apart

    As the president prepares to meet with Speaker Kevin McCarthy this week, his budget shares little common ground with spending and tax proposals from House Republicans.President Biden is set to welcome Speaker Kevin McCarthy and other top congressional leaders to the White House on Tuesday for a pivotal round of discussions about the nation’s taxes, spending and debt as a potentially catastrophic government default rapidly approaches.The talks come just weeks before the United States is expected to run out of cash to pay its bills unless the nation’s borrowing cap is lifted. Like previous moments of brinkmanship, the discussions have echoes of 2011 and 2013, when congressional Republicans refused to raise the debt ceiling unless a Democratic president agreed to curb federal spending and reduce budget deficits. The same dynamic is at play now, but with a crucial difference: The parties share almost no common ground on tax and spending proposals that are meant to reduce the growth of the nation’s $31.4 trillion debt.The meeting is not expected to produce anything close to final agreement on a fiscal plan that could include raising the debt limit. But even small points of consensus could be hard to come by.Mr. Biden wants to expand federal spending and reduce future debt, largely by raising taxes on high earners and large companies. Republicans have passed a bill to cut federal discretionary spending — a category that includes national parks, education and more — and cancel tax breaks for certain low-emission energy sources that were part of Mr. Biden’s signature climate law. Republicans have promised to extend the 2017 tax cuts that were approved by President Donald J. Trump and are set to expire at the end of 2025.While both sides say they want to reduce the nation’s future debt burden, there is almost no overlap in how they aim to achieve that outcome. The only point of agreement so far is on the one thing Mr. Biden and Mr. McCarthy consider off limits in budget talks: Social Security and Medicare, the primary sources of projected federal spending growth in the decades to come.The gulf on fiscal issues is one of several complicating factors in discussions over the debt limit, which the government technically hit earlier this year. Officials have been employing what are essentially accounting maneuvers to keep paying all the government’s bills on time without going over the current $31.4 trillion limit. But Janet L. Yellen, the Treasury secretary, warned in a letter last week that those efforts will no longer be possible as soon as June 1, risking a debt default that economists warn could spawn a financial crisis and recession.We Hit the Debt Limit. What Happens Now?Lawmakers will need to reach a bipartisan agreement to lift the debt limit. The longer it takes, the more turmoil there could be for the United States and the global economy.Mr. Biden has refused to negotiate directly over the limit, saying Republicans must vote to raise it without conditions, given that it simply allows the government to pay for spending that lawmakers in both parties have already approved. But he invited Mr. McCarthy and other congressional leaders to come to the White House on Tuesday for what he called a separate negotiation on fiscal policy — even though it is effectively linked to the debt limit drama.Republicans say they will not raise the limit without significant curbs in spending. That is the same position they took in 2011 and 2013, under President Barack Obama, when Mr. Biden was vice president. They did not make similar demands to raise the limit when they controlled Congress at the start of Mr. Trump’s term and Republican votes helped to effectively raise the limit.In 2011, Mr. Obama entered debt limit negotiations with a set of proposed spending cuts. They included a five-year freeze on discretionary spending not related to national security, a separate freeze on federal workers’ salaries for two years and the elimination of an air-to-air missile program and a fighting vehicle for the Marine Corps. Republicans countered with a budget that featured deep cuts to federal health care spending, privatizing Medicare for future beneficiaries and new tax cuts.Republicans ultimately agreed to raise the debt limit in exchange for budget changes centered on caps on discretionary spending — essentially modifying and expanding the spending freeze Mr. Obama had proposed in his budget.Unlike Mr. Obama more than a decade ago, Mr. Biden has never agreed with Republicans’ argument that federal spending has grown too large. He has proposed to scale back the growth in government debt, but his aides reject the Republican contention that the current path of the debt poses a significant threat to economic growth.Mr. Biden’s most recent budget included $3 trillion in proposals to reduce future deficits. The savings would come largely from tax increases on the wealthy and big corporations, along with cutting government spending on health care by broadening Medicare’s ability to negotiate prescription drug prices.Republicans have rejected all the tax increases and criticized Mr. Biden earlier this year for not proposing to spend even more on the military than he already did.House Republicans have not put forth or passed a budget. The bill they passed last month would raise the debt limit by $1.5 trillion or through March 2024, whichever came first. It would reduce future deficits by nearly $5 trillion, largely by freezing certain federal spending for a decade, according to the nonpartisan Congressional Budget Office.It also included new supports for fossil fuels, a rollback of Mr. Biden’s climate change agenda and an end to the president’s attempt to cancel student loan debt for most borrowers, which appears likely to be struck down by the Supreme Court regardless.Neither side has found anything to like in the other’s starting position. Republicans “didn’t produce a budget,” Representative Hakeem Jeffries of New York, the Democratic leader, who will join Mr. McCarthy at the White House meeting, told NBC News on Sunday. “What they did was produce a ransom note.”Representative Jodey C. Arrington of Texas, the chairman of the Budget Committee, countered that Mr. Biden would have to relent and negotiate with Republicans.Mr. Biden “has negotiated, as vice president and as a senator, debt ceiling increases, with common-sense spending controls and fiscal reforms,” Mr. Arrington told Fox News on Sunday. “And we’re just asking him to be a responsible leader and do that again.” More

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    California Panel Calls for Billions in Reparations for Black Residents

    A task force recommended that legislators enact a sweeping program to compensate for the economic harm from racism in the state’s history.A California panel approved recommendations on Saturday that could mean hundreds of billions of dollars in payments to Black residents to address past injustices. The proposals to state legislators are the nation’s most sweeping effort to devise a program of reparations.The nine-member Reparations Task Force, whose work is being closely monitored by politicians, historians and economists across the country, produced a detailed plan for how restitution should be handled to address a myriad of racist harms, including housing discrimination, mass incarceration and unequal access to health care.Created through a bill signed into law by Gov. Gavin Newsom in the wake of the nationwide racial justice protests after the murder of George Floyd in 2020, the panel has spent more than a year conducting research and holding listening sessions from the Bay Area to San Diego.It will be up to legislators to weigh the recommendations and decide whether to forge them into law, a political and fiscal challenge that has yet to be reckoned with.The task force’s final report, which is to be sent to lawmakers in Sacramento before a July 1 deadline, includes projected restitution estimates calculated by several economists working with the task force.One such estimate laid out in the report determined that to address the harms from redlining by banks, which disqualified people in Black neighborhoods from taking out mortgages and owning homes, eligible Black Californians should receive up to $148,099. That estimate is based on a figure of $3,366 for each year they lived in California from the early 1930s to the late 1970s, when federal redlining was most prevalent.To address the impact of overpolicing and mass incarceration, the report estimates, each eligible person would receive $115,260, or about $2,352 for each year of residency in California from 1971 to 2020, during the decades-long war on drugs.In theory, a lifelong state resident who is 71 years old, the average life expectancy, could be eligible for roughly $1.2 million in total compensation for housing discrimination, mass incarceration and additional harms outlined in the report.All of these estimates, the report notes, are preliminary and would require additional research from lawmakers to hash out specifics. The costs to the state were not outlined in the report, but totals from harms associated with housing and mass incarceration could exceed $500 billion, based on estimates from economists.While the panel members considered various methods for distributing reparations — some favored tuition or housing grants and others preferred direct cash payments — they ultimately recommended the direct payments.“The initial down payment is the beginning of a process of addressing historical injustices,” the report reads, “not the end of it.“Kamilah Moore, the chair, and Amos Brown, the vice chair, at the task force meeting on Saturday.Jason Henry for The New York TimesLast year, the task force, which is made up of elected officials, academics and lawyers, decided on the eligibility criteria, determining that any descendant of enslaved African Americans or of a “free Black person living in the United States prior to the end of the 19th century” should receive reparations.Still, on Saturday, there was sometimes contentious debate over clearly expressing the criteria in certain sections of the report — particularly regarding compensation.Should lawmakers pass legislation for payments, the panel suggested that a state agency be created to process claims and render payments, with elderly individuals getting priority. Nearly 6.5 percent of California residents, roughly 2.5 million, identify as Black or African American.“This is about closing the income and racial wealth gap in this country, and this is a step,” Gary Hoover, an economics professor at Tulane University who has studied reparations, said in an interview. “Wealth is sticky and is able to be transferred from generations. Reparations can close that stickiness.”In voting on its final report on Saturday on the Oakland campus of Mills College at Northeastern University, the panel also suggested that state legislators draw up a formal apology to Black residents. A preliminary report made public last year, outlined how enslaved Black people were forced to California during the Gold Rush era and how, in the 1950s and 1960s, racially restrictive covenants and redlining segregated Black Californians in many of the state’s largest cities.In emotional testimony for much of the past year, Black residents have stood before the panel often revealing personal stories of racial discrimination, lack of resources in communities because of redlining and trauma that has had negative effects on health and well-being.While the task force marked the first such effort by a state, a similar measure aimed at creating a commission to explore reparations has stalled in Congress for decades.Representative Barbara Lee speaking during the task force meeting on Saturday.Jason Henry for The New York TimesIn brief remarks before the panel on Saturday, Representative Barbara Lee, a Democrat whose district spans Oakland, lauded the work members have done.“California is leading on this issue,” said Ms. Lee, who is running for the U.S. Senate. “It’s a model for other states in search of reparative damage, realistic avenues for addressing the need for reparations.”The median wealth of Black households in the United States is $24,100, compared with $188,200 for white households, according to the most recent Federal Reserve Board Survey of Consumer Finances. In California, a recent report from the nonpartisan Public Policy Institute of California found for every $1 earned by white families, Black families earn 60 cents — the result of disparities in, among other things, education, and discrimination in the labor market.Assemblyman Reggie Jones-Sawyer, who is one of two state lawmakers on the panel, said he had spoken with Mr. Newsom in recent weeks and expressed optimism that legislation would be approved based on the panel’s report.“The reality is Black Californians have suffered, and continue to suffer, from institutional laws and policies within our state’s political, social, and economic landscape that have negated Blacks from achieving life, liberty and the pursuit of happiness for generations,” said Mr. Jones-Sawyer, who represents a Los Angeles district. “This really is a trial against America’s original sin, slavery, and the repercussions it caused and the lingering effects in modern society.”Mr. Jones-Sawyer said he expected to present some form of legislation early next year.But the efforts and support for racial justice that followed Mr. Floyd’s death are now confronted with an economy that is shadowed by fears of a recession. In January, Mr. Newsom announced that the state faced a $22.5 billion deficit in the 2023-24 fiscal year, a turnaround from a $100 billion surplus a year ago.Nationwide, opinions on reparations are sharply divided by race. Last fall, a survey from the Pew Research Center found that 77 percent of Black Americans say the descendants of people enslaved in the United States should be repaid in some way, while 18 percent of white Americans say the same. Democrats were even split on the issue, with 49 percent opposed and 48 percent in support. Other polls on the issue have found similar splits.Even so, cities across the country have moved forward with reparations proposals. In 2021, officials in Evanston, Ill., a Chicago suburb, approved $10 million in reparations in the form of housing grants.More recently, the San Francisco Board of Supervisors has expressed support for reparations that could offer several million dollars. And in nearby Hayward, Calif., city officials are hearing proposals for reparations for land taken from Black and Latino families in the 1960s.Kamilah Moore, a lawyer who is chair of the California task force, said she was confident that the Legislature would “respect the task force’s official role as a legislative advisory body and work in good faith to turn our final proposals into legislation.”“It will soon be in their hands to act,” Ms. Moore said. More

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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