MACRO: US jobs growth remains strong

• The Labor Department's closely watched employment report showed that nonfarm payrolls grew by 428K  the same as in March after being downwardly revised, and roughly 40K more than market forecasts. 
• Employment increased across all sectors, with the largest gains occurring in leisure and hospitality (78K), namely food services and drinking places (44K) and accommodation (22K); manufacturing (55K), mainly durable goods (31K); and transportation and warehousing (52K). Total payrolls are still about 1.2 million lower than the peak hit before the pandemic. 

Today's reading marked a 12th straight month of job gains above 400K. Source: Bloomberg via ZeroHedge

• Unemployment rate was unchanged at 3.6%, remaining the lowest since February 2020 and compared with analysts estimates of 3.5%; 
• The labor force participation rate declined from 62.4% to 62.2% mostly among people ages 16-24;
• Average hourly earnings for all employees on private nonfarm payrolls in the US increased by 10 cents, or 0.3%, to $31.85 in April, after an upwardly revised 0.5% rise in March and below market expectations for a 0.4% increase. Average hourly earnings increased 5.5% YoY, following a 5.6% rise in March and in line with market expectations. 

Today's strong labor market data indicates the US economy may be sufficiently resilient to the ramped up expectations of further monetary policy tightening by the Fed even despite workers shortages. Wage growth was rather muted within the last three months, however this may be only a temporary phenomenon. If salaries catch up in the future and the labour market remains tight, then this may put more pressure on the Fed.