A Goldilocks Jobs Report
Employers add 175,000 jobs in April
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If Wall Street got to design its own jobs report, it would look a lot like this:
U.S. payroll employment increased by 175,000 in April, which is healthy growth despite being about 70,000 fewer new jobs than expected. We’ve averaged a stellar 246,000 new jobs per month in 2024.
The unemployment rate inched up to 3.9% and has now been below 4.0% in each of the past 27 months, the longest streak since Nixon was in office. The labor force grew modestly, and the labor force participation rate stayed unchanged at 62.7%.
The best news in this report is that average hourly earnings increased just $0.07 in April and are up 3.9% since April 2023. That’s the smallest year-over-year increase since May 2021, and over the past three months, earnings have increased at a perfectly acceptable 2.8% annualized rate. This is a good—albeit relatively minor—sign regarding inflation.
By Industry
This gets interesting when we look at it by industry. Information (think tech and media) and professional and business services lost jobs for the month, and the financial activities segment added just 6,000 jobs. Which is to say, it’s getting harder out there for white collar workers in search of employment, especially recent college graduates according to anecdotal information.
Education and health services (doesn’t include public schools, that’s the government category) once again led the charge, and 87,000 of those jobs were in the healthcare and social assistance category.
Trade and transportation also had a good month, with solid hiring in retail (+21,000), wholesale (+10,100), and transportation and warehousing (+21,800).
Odds and Ends
The prime age employment-to-population ratio for women increased to 75.5% in April, the highest level on record. This is good!
Temporary help services (think temping agencies) lost another 16,400 jobs. If you subscribe to the theory that this predicts future hiring, this is not good!
The share of people working part time fell sharply for the month. This doesn’t mean much, but a lot of critics like to point out the share of job growth that’s part time, so…
Final Thoughts
It really doesn’t get much better than this, folks. Job growth slowed to a less hot but still strong level. Unemployment stayed low. Wage growth appears to be moderating. And many of the sectors that are driving services inflation appear to be shedding jobs, which will hopefully ease price pressures. Equity market futures soared on the news, and the possibility of two Federal Reserve rate cuts this year is back on the table.
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