“This has been an extraordinary jobs recovery, but this kind of growth can’t last forever, especially now that unemployment is so low,” said Scott Anderson, chief economist at Bank of the West in San Francisco. It is getting harder and harder to find people to return to the job market, even if they are paying higher wages.”
In April, the biggest gains were concentrated in leisure and hospitality, manufacturing, and transportation and warehousing, as companies tried to keep up with steady consumer demand for goods and services.
The rapid rebound in the labor market has been a cornerstone of the recovery from the pandemic and a major political asset for the Biden administration, despite the fact that the workforce has been kept depressed by a number of factors, including retirement and the watch out. Employers posted a record 11.5 million job openings in March, nearly double the number of people looking for work, according to a Labor Department report released earlier this week.
That continued strength has empowered the Federal Reserve to take aggressive action to curb inflation. The central bank raised interest rates this week by half a percentage point, the biggest increase since 2000, in hopes of cooling the economy without plunging it into recession.
“We need to do everything we can to restore stable prices as quickly and effectively as possible,” Fed Chairman Jerome H. Powell said on Wednesday. “We think we have a good chance of doing it without a significant increase in unemployment or a really sharp slowdown.”
Still, there are signs of growing uncertainty. The US economy unexpectedly contracted in early 2022, largely due to widening trade gaps and falling inventory purchases. Inflation remains at 40-year highs. And stock market prices, which soared to record highs during the pandemic, plunged last week, amid renewed fears of a possible recession this year or next.
“We’re in a weird stage of the cycle right now, where it’s not entirely clear which way things are going,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “Obviously it’s a skittish market environment and we’re starting to see some softening in a few different ways.”
But for many workers, the tight labor market is still beneficial.
Leah Kush, who lives near Chicago, recently left her job of 11 years in the radio industry to take a position with a digital marketing company. It all happened so fast: Kush applied for her in early April, was interviewed a week later, and received a job offer less than 24 hours later.
“It was so easy that I was like, ‘Wow, this was meant to be,’” the 41-year-old said. “I feel alive again.”
Kush earns 33 percent more than he did at his last job, where he hadn’t received a raise in eight years.
“There was no extra payment, but they kept piling stuff on my plate,” he said. “Finally, in January, I said, ‘I have to find something new.’ And I’m so glad I did.”