Friday's report from the government reflected the job market's resilience after more than a year of rapid interest rate increases by the Fed. Many industries, from construction to restaurants to health care, are still adding jobs to keep up with consumer demand and restore their workforces to pre-pandemic levels.
Still, the hiring data is typically considered more reliable on a monthly basis because it is based on a larger survey of companies. The unemployment rate is derived from a smaller survey of households. Having imposed 10 straight rate hikes since March 2022, the Fed is widely expected to skip a rate increase when it meets later this month, though it may resume its increases after that. Chair Jerome Powell and other Fed officials have made clear that they regard strong hiring as likely to keep inflation persistently high because employers tend to raise pay in a tight job market. Many of these companies then pass on their higher wage costs to customers in the form of higher prices.
And consumers are showing signs of straining to keep up with higher prices. The proportion of Americans who are struggling to stay current on their credit card and auto loan debt rose in the first three months of this year, according to the Federal Reserve Bank of New York.