Is the Labor Market Gaining Strength?

Alex Ossola (0:00)

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April's job numbers blow past expectations, but we may not be out of the low-hire, low-fire labor market quite yet. Plus, what a decision by the Virginia Supreme Court means for Democrats' hopes of retaking the House in the midterms.

Ken Thomas (0:37)

While this is certainly something that makes Democrats winning back control of the House much more difficult, I don't think this decision favors Republicans in the big picture.

Alex Ossola (0:50)

Why is that? We'll get into it. And in a big win for Intel, it will supply some chips for Apple Devices, a deal that was pushed by the Trump administration. It's Friday, May 8th. I'm Alex Ossola for the Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.

Let's start the show with some good news. US employers added 115,000 jobs in April, blowing past analyst expectations for the second month in a row. Meanwhile, the unemployment rate stayed at 4.3%.

For more on what's behind the numbers, I'm joined now by WSJ economics reporter Chao Deng. Chao, a few months ago, economists were really worried about a hiring slowdown hurting the economy. Now this is the second really good month in a row of jobs numbers. Can we safely say that the labor market has strengthened?

Chao Deng (1:51)

I think that the strong number from today is a glimmer of hope that it will become easier for those without a job to find a job. That said, I think economists will probably want to see job gains for a few more months before they feel like conditions have really turned to page. It's two months of strong data that we've seen. So it's a little bit early to say that companies are shrugging off the Iran war, or even completely shrugging off tariffs. But businesses are seeing conditions stabilizing, and they have weathered tariffs, so some are hiring.

Alex Ossola (2:26)

Were there any surprises among the sectors where we saw this growth? I mean, a lot of the growth over the past few months has come from industries like healthcare. Did we see that again this month?

Chao Deng (2:36)

Yeah, very much so. Healthcare and social assistance jobs continue to power the overall job gains. We saw healthcare add 54,000 jobs in April.

One surprise was the retail sector. We saw jobs there in supercenters and warehouse clubs. Broadly speaking, jobs are coming through in more sectors than just healthcare.

Alex Ossola (3:01)

Of course, we would be remiss to not talk about the Fed. It's been caught between inflation concerns and worries about a deteriorating job market. Those two mandates, always intention. What does it mean for the Fed if the jobs market seems like it's getting stronger?

Chao Deng (3:16)

For a long time, the Federal Reserve has wondered whether it needs to keep cutting interest rates to support what appears to be a shaky labor market. Now that we've had this strong report, I think it puts more focus on the inflation data, which we'll see next week from the Labor Department for the month of April.

We know inflation is drifting up instead of down because of tariffs and also because of the effects of the Iran War. And so I think we're going to see the Fed focusing increasingly on that.

Alex Ossola (3:45)

That was WSJ Economics reporter, Chao Deng. Thanks so much, Chao.

Chao Deng (3:48)

Thanks.

Alex Ossola (3:49)

And let us know if you've got any questions on this labor market. You can send a voice memo to wnpod at wsj.com or leave us a message at 212-416-4328.

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The Journal has learned that Apple and Intel have reached a preliminary agreement for Intel to make some chips for Apple devices. The deal is the result of talks between the two companies that have been going on for more than a year. Intel's stock soared 14%, closing at a record, while Apple gained 2%. The deal would be a big one for Apple, which has been under pressure to find enough advanced chips to meet consumer demand for its devices. And it's an even bigger one for Intel, which has struggled for years after falling behind chip-making rivals like TSMC and Samsung. Last summer, the Trump administration took a 10% stake in Intel, and the government played a key role in bringing Apple to the table for this deal, the latest chapter in Intel's comeback story. Representatives for the two companies declined to comment. In other deals news, it's a first for a big Western automaker. Stellantis, the company behind Jeep, Chrysler, Fiat, and Ram, says it has a deal in Europe with a Chinese car company. Two Stellantis factories in Spain will produce electric vehicles with a Chinese company Leap Motor. WSJ Auto's reporter Stephen Wilmot says this will be a closely watched test of collaboration between Western automakers and their growing Chinese rivals.