NEW YORK (BLOOMBERG) - US employers hired at a robust pace in April, yet cooling wage gains and a jump in workers leaving the labour force offered mixed signs for a Federal Reserve that is aggressively raising interest rates to curb hot inflation.

The 428,000 gain in non-farm payrolls matched the advance in March and was broad-based across industries, a labour Department report showed Friday (May 6). The unemployment rate held at 3.6 per cent and average hourly earnings rose, albeit at a more moderate pace from a month earlier.

The median estimate in a Bloomberg survey of economists called for a 380,000 advance in payrolls and for the unemployment rate to fall to 3.5 per cent.

Ten-year Treasury yields rose, US stock futures fell and the dollar advanced. The solid payrolls advance suggests demand for labour remains strong. Job openings and quits are back at record highs, and businesses are scrambling to hire enough workers to keep up with resilient consumer demand.

The extreme competition for workers has driven up wages at a rapid pace in recent months, and the drop in participation suggests employers will have to do even more to lure workers back.

Even so, many workers have not seen their incomes keep up with inflation. Friday's report showed that average hourly earnings rose 0.3 per cent from March, falling short of economists' estimates after an upward revision to the prior month.

Earnings were up 5.5 per cent from a year earlier. It is hard to tell if this is the start of a sustained moderation in wage growth or a temporary break in the pace of rampant gains. The former would be good news for the Fed as it seeks to subdue the fastest inflation in four decades.

Fed chairman Jerome Powell said Wednesday that the central bank hopes to temper demand for workers, with the aim to slow wage growth and inflation "without having to slow the economy and have a recession and have unemployment rise materially".

Policymakers this week raised interest rates by the most since 2000 in an effort to combat rising prices, and Mr Powell said hikes of such size are on the table for upcoming meetings as well.

"The data confirm the Fed's view that the labour market remains resilient and has strong positive momentum," chief US economist at High Frequency Economics Rubeela Farooqi said in a note.

"However, wage pressures are in focus and elevated gains are indicating ongoing competition for still-scarce labour, which is lifting labour costs."

The labour force participation rate - the share of the population that is working or looking for work - fell to 62.2 per cent, the lowest in three months, and the rate for workers ages 25 to 54 edged lower.

That makes the Fed's job more complicated in trying to bring labour demand in line with supply. The number of people that went from employed to not in the labour force exceeded five million for the first time since the immediate aftermath of the pandemic.

The figures, which are volatile on a monthly basis, may still suggest retirements or people quitting without lining up another job or looking for work. A variety of factors, including caregiving responsibilities for children and the elderly, have kept participation from bouncing back to its pre-pandemic levels.

Looking ahead, higher wages paired with surging prices for necessities like food and shelter may bring more Americans back to the labour force.

Job growth was broad-based across industries, led by leisure and hospitality, manufacturing and transportation and warehousing.