U.S. ECONOMY ADDS 253K JOBS IN APRIL

So, jobs report today, the US economy added 253,000 jobs last month. Now, this was an increase of around 90,000 jobs compared to the month before. Unemployment also ticked down a tenth of a percent at 3.4 now. This is the lowest level for over 50 years. Average hourly earnings also went up 0.5% last month. And here to talk to me about the report is Julia Pollack, chief economist, Zip Recruiter. Now, first things first, how do you feel about today's numbers? Well above expectations. Well, the labor market is normalizing, it's cooling, but it's doing so at a very controlled and gradual pace. And I think that's very encouraging news for everyone. The labor market continues to defy expectations and even the weakest industries, even the industries that we know should be suffering right now amid high borrowing costs and business uncertainty, construction, manufacturing, even they are managing somehow to add jobs in this economy. So it looks like the economy is doing just fine. The labor market is still doing well and most measures while they are returning to normal are still better for workers and job seekers than before the pandemic. And you know, on top of the number that we got today, unemployment actually ticked down a tenth of a percent. Maybe talk a little bit about that. Right. This is the lowest unemployment rate in decades. It is showing how tight the labor market is. This is a very supply constrained labor market. I am actually in California at a hotel with a bunch of Zip Recruiter customers, employers who specialize in high volume, low wage recruiting, and they are seeing no decline in demand for their goods and services. They are hiring and they just can't fill vacancies quickly enough. That's because this remains a very, very, very tight labor market where while labor supply is improving and recovering slowly, it can't possibly recover fast enough to meet the need. I mean, I think with all the talks of recession, I think some are looking for any signs of cracks in the labor market. And one of the things that they look at is weekly hours, because employers might first cut workers hours before resorting to layoffs. And maybe talk a little bit about this. What are you seeing in weekly hours? So hours were unusually high at the start of the pandemic when employers had to cut lots of workers and were in many cases forced to impose mandatory overtime on workers to keep the doors open. That was popular with workers for a short while because it allowed them to earn more money, but it became very unpopular after a month or two and many people quit as a result of burnout. Now, we're seeing hours sort of go back to normal. These are the levels of sort of weekly hours that are very kind of consistent with a strong, stable labor market, with a sustainable, with sustainable job growth. And let me ask you this as well. Do you think that with the Fed funds rate at 5%, I mean, that is restrictive to a degree for sure? And as well with the banking troubles we're seeing, you know, banks will definitely tighten lending standards and, you know, credit is the lifeblood of the economy. So with credit being harder to come by, that could potentially affect businesses and employment. What are your thoughts on that? Absolutely. So job growth right now would probably be about twice as high were it not for the fact that interest rates have risen so much so quickly there. And then these interest rates, of course, we know that monetary policy operates with a lag. And so we shouldn't be too sanguine about this report. We could see further cool downs and slowdowns in the coming months. And then we are also seeing lending by small banks and regional banks shrink substantially as they try to shore up their balance sheets and prevent any kind of crisis there. So those banks are very much the lifeblood of the economy, of job growth in small businesses and of home purchases for first-time homebuyers. And if those banks are not making loans, we can see that show up in employment numbers in the coming months. And I always like to look forward in these types of things. The Fed said a mild recession could hit this year. Any signs at all from what we're seeing with the job numbers right now? Well, so far, the GDP report for Q1 was remarkably strong with growth. If you take out inventories and foreign trade at 2.9 percent a year, the GDP now model also suggests that the economy is growing at a very healthy clip. The main six recession indicators that the National Bureau of Economic Research tracks to date a recession are all still in pretty positive territory. So for now, there doesn't seem to be much sign that a recession has already begun. But that doesn't mean that there isn't a risk of recession in the coming months. All right, just one more thing. And of course, I have to ask about AI. A lot of talk about AI displacing jobs. What do you think the impact will be? So there are some announcements in recent weeks that suggest that companies are looking at ways to replace jobs with AI. Some are already doing so. IBM just made a pretty startling announcement that they're cutting thousands of jobs and replacing them with AI. But there's also evidence coming out that AI has some unexpected effects on the labor market. Traditionally, people expect that it'll make your highest, most educated workers sort of super human and very productive, but replace the jobs of less educated workers. In a recent study that came out of a Fortune 500 company's 5,000 customer support staff, it actually raised productivity the most for the most young, new and untrained, unskilled workers and allowed them to be as productive as highly skilled, highly trained workers. And so what is exciting about that is that perhaps the constraints that employers see in the labor market, perhaps the quality problems they see with candidates are not going to be such a barrier anymore. Perhaps they'll be able to hire young, less educated workers and get them up to speed much more quickly. Julia, thanks for the insight today. Pleasure having you on. Take care. Good to talk to you too. So leading the job gains was in the professional and business services sector with an increase of 43,000. That's followed by health care, leisure and hospitality and social assistance. And despite banking industry troubles, jobs in finance increased by 23,000.