U.S. jobless rate holds steady in April, likely to rise if Iran war continues

WASHINGTON, May 8 (Xinhua) -- The U.S. unemployment rate held steady at 4.3 percent in April but could rise if the conflict in Iran continues, experts said.

Nonfarm payrolls increased month-on-month by a seasonally adjusted 115,000, down from 185,000 in the month prior, according to data released Friday by the Bureau of Labor Statistics.

Average hourly earnings were lower than economists had forecast, rising 0.2 percent month-on-month and 3.6 percent on an annual basis, compared with estimates for 0.3 percent month-on-month and 3.8 percent annually.

Experts said that while the Iran conflict has not majorly impacted U.S. jobs thus far, it could do so later.

Gary Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics, told Xinhua: "I was pleasantly surprised by the job number, above 100,000. But I still expect high energy prices to take a toll on the economy and job creation in the next several months."

"Count me among the skeptics who expect a rise in the unemployment rate," Hufbauer said.

Other economists echoed those sentiments.

Dean Baker, co-founder of the Center for Economic and Policy Research, told Xinhua that though the war has not yet had a great impact on the job market, "if the war continues and oil prices stay high, and this gets passed through to other sectors, the economy will surely slow and unemployment is likely to rise."

However, some experts are more upbeat about the labor market.

Austan Goolsbee, president of the Federal Reserve of Chicago, said Friday in a CNBC interview that the report shows the labor market has been "pretty much stable for a year, year and a half."

"I characterize that we've been stable without being good," Goolsbee said.

Others have warned of cautious optimism, noting that while they believe the economy is resilient, one solid monthly report does not establish a new trend.

Scott Clemons, chief investment strategist at Brown Brothers Harriman, said on Friday that "one month does not establish a new trend," noting that "there's been a lot of month-to-month volatility in the jobs market over the past year. I'm not sure that's completely gone away. We get another two or three months of solid job gains, then I feel a little bit more comfortable."

While Friday's report may be good news to the party of U.S. President Donald Trump, experts said the GOP could feel voters' ire if gas prices remain high due to the war in Iran.

At the same time, soaring gasoline prices have further increased the already high cost of living, a major political challenge for Trump even before the war.

Brookings Institution Senior Fellow Darrell West told Xinhua that the unemployment rate is good news for the Trump administration, "but the rising cost of living remains a major challenge."

"Gas prices have increased dramatically and other expenses have arisen as well. The political environment still is treacherous for President Trump and the Republican Party," West said.