Kamal Ghorui
File photo: Hiring sign for sales professionals is displayed at a store in US (Picture credit: AP)
America’s employers added a stronger-than-expected 115,000 jobs in April despite economic uncertainty triggered by the Iran war, according to data released by the US labor department on Friday.The unemployment rate remained unchanged at 4.3 per cent, while hiring beat economists’ expectations of 65,000 new jobs, although it slowed from the revised 185,000 jobs added in March.The latest data suggests the US labour market has remained resilient even as the conflict in West Asia disrupted global oil supplies and pushed average US gasoline prices above $4.50 a gallon this week.“The labor market is not booming, but it is proving harder to break than many feared,” Olu Sonola, head of US economics at Fitch Ratings, said, as quoted by news agency AP.
Healthcare, transport sectors lead hiring
Healthcare companies added 37,000 jobs in April, while transportation and warehousing firms added 30,000 positions, according to the report.However, manufacturers cut 2,000 jobs during the month and have shed 66,000 jobs over the past year despite President Donald Trump’s protectionist trade policies aimed at boosting factory employment.Average hourly earnings rose 0.2 per cent from March and 3.6 per cent year-on-year, broadly aligning with the Federal Reserve’s inflation target.The labour force participation rate fell to 61.8 per cent, its lowest level since October 2021, as retirements and tighter immigration policies reduced the number of people seeking work.
Iran war and inflation concerns remain
Economists said the economy has so far weathered the impact of the Iran conflict better than expected, although risks remain if high energy prices persist.“Businesses to some extent are viewing the conflict in Iran as temporary,” Gus Faucher, chief economist at PNC, told AP. “We continue to see solid growth in consumer spending. And we’re seeing strong business investment, particularly around tech and AI.”However, Faucher warned that “the longer conflict in Iran lasts, the higher energy prices go, the longer they stay elevated the greater the drag on the economy.”The Iran war sharply disrupted shipping through the Strait of Hormuz after Iran closed the crucial route following US-Israeli strikes on February 28. The move caused oil prices to surge and raised fears of slower global economic growth.
Fed likely to hold rates steady
The stronger-than-expected jobs report is also expected to reduce pressure on the Federal Reserve to cut interest rates soon.Inflation climbed to 3.3 per cent in March, its highest level in two years, driven largely by rising fuel prices.Friday’s employment data “actually makes it less likely that we see a rate cut anytime soon,” Faucher said, adding that the Fed may prefer to focus on bringing inflation back towards its 2 per cent target before easing borrowing costs.
