Employers added 428,000 jobs in April as unemployment rate remains unchanged

America’s economy maintained its strong momentum in April, as the U.S. added 428,000 jobs — above the consensus estimate of 395,000. The unemployment rate, meanwhile, remained unchanged at 3.6 percent.

Average hourly earnings for workers climbed by 0.3 percent month-on-month, a slower pace than the 0.5 percent seen last month. Year-on-year, earnings were up 5.5 percent, compared with an inflation rate of 8.2 percent. That means many workers, even if employed, may not be benefiting from the post-pandemic economic recovery.

The data will likely keep pressure on the Federal Reserve to act aggressively to pull inflation down from 8 percent to 2 percent.

In a news conference Wednesday following the Federal Reserve’s announcement of a 0.5 percent interest rate increase, Chairman Jerome Powell noted that labor demand remained “very strong,” while labor supply remained subdued.

“Employers are having difficulties filling job openings, and wages are rising at the fastest pace in many years,” Powell said.

Economists believe the Fed is likely to raise rates by another 0.5 percent in June in an effort to cool inflation. In a note to clients in advance of Friday’s jobs numbers, Bank of America said the trend of individuals moving from outside the labor force entirely to employment remains well above pre-pandemic levels, putting further pressure on the Fed to act.

Thursday’s dramatic market sell-off showed that investors fear the Fed may have to act more aggressively than it had planned.

At the same time, the sell-off may end up reducing pressure on the Fed to be proactive. At least one economist believes additional rate hikes beyond next month’s may not be necessary.

“We do expect a steep, sustained drop in inflation, starting with next week’s April [consumer price index] report,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a note to clients.

“At the same time, we also expect a clear softening in manufacturing, and a meltdown in housing market activity, all of which suggest that a third straight [hike], in July, is less likely than markets thought before the meeting.”