U.S. economy added 428K jobs in April: what does it mean for investors?

Bureau of Labour Statistics on Friday said the U.S. economy added 428,000 jobs in April. The number topped economists’ forecast by 37,000.

What does it mean for the recession debate?

The employment data was evidently resilient in the face of wage pressures and worker shortages, but it did little to help the Wall Street indices that remain in the red today. On CNBC’s “The Exchange”, Bokeh Capital’s Kim Forrest said:

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The big question earlier this week was, are we in a recession? I think the jobs number today answers that question as no we’re not in a recession. But that doesn’t tell us if we are going into a recession. And that’s making investors super nervous.

The jobless rate, as per the data this morning, remained steady at 3.60% – marginally below where it was before the pandemic in February 2020. Average hourly earnings went up another 0.3% in April.

Forrest continues to be positive on growth names

The data on Friday further bolsters the thesis that the U.S. Federal Reserve will continue to be aggressive in taming inflation this year. Still, Forrest remains bullish on the growth names for the long term.

I don’t care where we are. I like companies with real balance sheets, profits, and cash flows. I still look for growth. Wall Street rewards growth. So, I’m still playing really long-term technology changes and that would still be 5G.

The U.S. GDP unexpectedly fell at an annualised pace of 1.4% in the first quarter of 2022, prompting the central bank to lift rates by 50 bps earlier this week. Chair Jay Powell, however, confirmed a broader increase is unlikely in the next couple of meetings.