Finance

The unemployment rate barely rose, but only 175,000 jobs were added in April

Published

1 year ago

May 3, 2024

Business Finance News

A lackluster 175,000 jobs were added in April, many in the healthcare sector. (iStock)

The U.S. added 175,000 jobs in April, according to the Bureau of Labor Statistics Employment Situation report. That’s a small jump compared to the average monthly increase of 242,000 that occurred over the last 12 months.

In April, the unemployment rate sat at 3.9%, up slightly from 3.8% in March, putting the total number of unemployed individuals at 6.5 million. Those who qualify as long-term unemployed — individuals without a job for 27 weeks or more — hovered at 1.3 million, practically unchanged from last month.

Of the industries faced with job losses, the mining, quarrying and oil and gas extraction sectors were hit particularly hard, registering a 3.5% drop in jobs.

Computer and electronic product manufacturing jobs also declined by 1%. Other manufacturing industries, namely electrical equipment, appliance and component manufacturing saw a decline in jobs by 1.2%.

The healthcare industry added the largest number of jobs in April at 56,000. The industry has been adding a consistent 63,000 jobs per month over the last year.

Social assistance jobs also rose in April, by 31,000. Family services jobs led the social assistance sector, adding 23,000 jobs. Following closely was the transportation and warehouse industry, adding 22,000 jobs in total.

Is your debt getting you down? Think about a debt consolidation loan to wrap all your payments into a single payment each month. You can plug in some simple information into Credible’s free online tool to determine if a debt consolidation loan is your best option.

RISING NUMBER OF WORKERS DEPEND ON SIDE JOBS

Consumers are becoming more cautious about spending

American consumers aren’t spending as freely as they were a few months ago and are choosing to stick to smaller purchases. Additionally, those with lower credit scores are refraining from spending unless necessary, Citi reported in its annual stockholder meeting.

High credit card balances are making extra spending difficult for many, according to Citi. Americans’ total credit card balances stood at $1.13 trillion at the end of last year, an increase of $50 billion, or 4.6%.

Although credit card delinquency rates fell in March, indicating that some borrowers are recovering, they’re still notoriously high. The average delinquency rate dropped from 3.09% in February to 2.92% in March. This rate is 2.49% higher than a year ago and is still higher than pre-pandemic rates.

Anyone struggling to pay off debt should consider consolidating their debt into a low interest personal loan. Visiting Credible can help you compare debt consolidation options to find the best personal loan rates for you.

MANY PERSONAL LOAN BORROWERS RELY ON LOANS FOR EVERYDAY EXPENSES AS COST OF LIVING GROWS

Interest rates remain stubbornly high

Despite predictions that interest rates would be lower by now, the Federal Reserve has yet to cut rates. The Fed attributes this to inflation, which is still higher than they’d like to see.

Mortgage rates remain one of the highest rates consumers are dealing with. Although mortgage rates are separate from the rates the Fed deals with, they often follow closely. Until the Federal Reserve drops rates, mortgage rates aren’t likely to go down anytime soon.

“If the Fed does not cut rates this year, the housing market will likely remain status quo: Gridlocked on the resale side and builders buying down rates allowing the new construction side to continue its out performance,” Devyn Bachman, the chief operating officer of John Burns Research & Consulting, said.

Currently, mortgage rates hover above 7% for 30-year, fixed rate loans. Rates aren’t the highest they’ve ever been, but they’re much higher than the drastic lows seen during the pandemic.

“The housing market has always been interest rate-sensitive. When rates go up, we tend to see less activity,” Danielle Hale, Realtor.com’s chief economist, said.

“The housing market is even more rate sensitive now because many people are locked into low mortgage rates and because first-time buyers are really stretched by high prices and borrowing costs,” Hale said.

If you are considering buying a house right now, make sure you’re getting the lowest interest rate possible. Credible can help you view multiple mortgage lenders and provide you with personalized rates within just minutes, all without impacting your credit.

MILLIONS HAVE MOVED OUT OF CERTAIN PARTS OF THE COUNTRY NOW DESIGNATED “CLIMATE ABANDONMENT AREAS”

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

Finance

Stocks making the biggest moves midday: WOOF, TSLA, CRCL, LULU

Published

8 hours ago

June 6, 2025

Business Finance News

Finance

Swiss government proposes tough new capital rules in major blow to UBS

Published

10 hours ago

June 6, 2025

Business Finance News

A sign in German that reads “part of the UBS group” in Basel on May 5, 2025.

Fabrice Coffrini | AFP | Getty Images

The Swiss government on Friday proposed strict new capital rules that would require banking giant UBS to hold an additional $26 billion in core capital, following its 2023 takeover of stricken rival Credit Suisse.

The measures would also mean that UBS will need to fully capitalize its foreign units and carry out fewer share buybacks.

“The rise in the going-concern requirement needs to be met with up to USD 26 billion of CET1 capital, to allow the AT1 bond holdings to be reduced by around USD 8 billion,” the government said in a Friday statement, referring to UBS’ holding of Additional Tier 1 (AT1) bonds.

The Swiss National Bank said it supported the measures from the government as they will “significantly strengthen” UBS’ resilience.

“As well as reducing the likelihood of a large systemically important bank such as UBS getting into financial distress, this measure also increases a bank’s room for manoeuvre to stabilise itself in a crisis through its own efforts. This makes it less likely that UBS has to be bailed out by the government in the event of a crisis,” SNB said in a Friday statement.

‘Too big to fail’

UBS has been battling the specter of tighter capital rules since acquiring the country’s second-largest bank at a cut-price following years of strategic errors, mismanagement and scandals at Credit Suisse.

The shock demise of the banking giant also brought Swiss financial regulator FINMA under fire for its perceived scarce supervision of the bank and the ultimate timing of its intervention.

Swiss regulators argue that UBS must have stronger capital requirements to safeguard the national economy and financial system, given the bank’s balance topped $1.7 trillion in 2023, roughly double the projected Swiss economic output of last year. UBS insists it is not “too big to fail” and that the additional capital requirements — set to drain its cash liquidity — will impact the bank’s competitiveness.

At the heart of the standoff are pressing concerns over UBS’ ability to buffer any prospective losses at its foreign units, where it has, until now, had the duty to back 60% of capital with capital at the parent bank.

Higher capital requirements can whittle down a bank’s balance sheet and credit supply by bolstering a lender’s funding costs and choking off their willingness to lend — as well as waning their appetite for risk. For shareholders, of note will be the potential impact on discretionary funds available for distribution, including dividends, share buybacks and bonus payments.

“While winding down Credit Suisse’s legacy businesses should free up capital and reduce costs for UBS, much of these gains could be absorbed by stricter regulatory demands,” Johann Scholtz, senior equity analyst at Morningstar, said in a note preceding the FINMA announcement.

“Such measures may place UBS’s capital requirements well above those faced by rivals in the United States, putting pressure on returns and reducing prospects for narrowing its long-term valuation gap. Even its long-standing premium rating relative to the European banking sector has recently evaporated.”