RESEARCH TRIANGLE PARK – Friday’s jobs report showing that the U.S. added more than 250,ooo new jobs rather than a expected decrease triggered positive reactions from three Triangle economists, although one – Dr. Anne York of Meredith College – still has concerns.

“Continued growth in the job market is the big economic surprise for this year,” N.C. State economist Dr. Mike Walden told WRAL TechWire.

Why? Here’s what CNN reported:

“Economists were expecting job growth to decline for the third consecutive month, 180,000 jobs to be added, and for the unemployment rate to increase to 3.6%, according to Refinitiv. Only three economists of the 87 polled by Refinitiv had projected job growth near or above 253,000.”

Companies keep hiring: US adds 253,000 jobs – unemployment rate drops to 3.4%

Employers ignored worries about layoffs in the tech sector, inflation, recession and a looming banking crisis to hire, hire, hire.

UNC Kenan-Flagler Business School Professor Christian Lundblad in a media briefing labeled the report as “strong” and “broadbased.”

Walden pointed out several high points:

“There was also a substantial increase in hourly wages.   While tech hiring is stalled, sectors hurt during the pandemic – like leisure/hospitality and health care – are seeing a surge in hires. So we continue to see some reversals of what happened in the labor market during the pandemic, with a moderation in the labor shortage facing many economic sectors.”

The jobs report also may mean no halt to interest rate increases. “Overall, inflation remains stubbornly high,” Lundblad said. “At the end of the day, this drives Fed policy right now. Earlier this week, three Triangle economists – Walden, York and UNC’s Gerald Cohen – believed a pause in rate hikes could happen.

Triangle economists: Looks like a pause is coming on interest rate hikes

Meredith’s York mixed positive and negative views.

“Our labor market is still in recovery mode from the damage done to it when the pandemic started, so that is part of the reason why we are still seeing very good labor market data even though our GDP growth is slowing down.,” she said.

But inflation is a big worry, she says, as is the number of people seeking work – not enough of them.

“For inflation to be tamed, we need to see high growth in labor force participation, which is the available supply of workers.  The labor force participation rate currently is at 62.6% but was at 63.3% in February 2020.  In looking through the Bureau of Labor Statistics data, it is encouraging that there is some growth in their measurement of persons who want a job but were not actively seeking a job when they did their April survey.  These people are not currently counted as unemployed or part of the labor market,” York said. “But hopefully more people wanting a job will translate to more people actively seeking and accepting work, which will increase the labor supply and then will have a moderating effect on wage growth and prices.”

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Looking ahead, Walden – who has said there is growing chances of a recession – says the Federal Reserve will continue to face challenges on how to slow inflation. Are more interest rates coming as those announced Thursday?

“While growth in the labor market is certainly good for workers, the big question is this:  is what we are seeing – a moderation in the inflation rate combined with still-increasing numbers of jobs – a sign of a soft landing emerging, where the Fed is will be able to contain inflation without inflicting tremendous harm on the economy?   Or, will the Fed interpret the April job report as meaning they have more work to do – suggesting further interest rate hikes ahead?

“Another possibility is that a recession does occur, but it is confined to the “capital market” – primarily investments – but it exempts the labor market.  We are certainly living in interesting times.”