The April jobs report from the Bureau of Labor Statistics shows continued progress in the job market recovery while also displaying signs that the labor market is cooling. The economy added a solid number of jobs despite tight labor market conditions. Over the past year, the labor market has added over 6.5 million jobs and is on track to return to pre-pandemic levels by this summer, but very low unemployment indicates that job growth will likely slow down.JobGet Unemployment Report Apr v2-converted (1)
The U.S. job market added 428,000 jobs in April, matching the downwardly revised job gains for March. While not as high as in previous months, April’s job growth remained strong and was higher than expected. This represents the 16thstraight month of job growth and the 12th straight month of job gains over 400,000. The unemployment rate remained steady, holding at the pandemic low of 3.6%.
The biggest job gains for April were once again in the hard-hit Leisure and Hospitality sector. Leisure and Hospitality added 78,000 jobs, accounting for 18% of total job gains. Hiring in restaurants and bars continued to account for most of the job growth (56%). Job growth was also strong in Manufacturing, Transportation, and Warehousing.
Average hourly wages increased by 0.31% in April or 5.5% on a year-over-year basis. While strong, the monthly increase is a slight slowdown from March and is still below the pace of inflation (8.3% on an annual basis).
The labor force declined by 363,000 workers in April. The job market has made a remarkable recovery, but with very low unemployment and employment nearly back to pre-pandemic levels, it is likely that growth in future months will slow.
The total number of unemployed individuals fell from 6 million in March to 5.9 million in April. The number of people on temporary layoffs dropped slightly while the number of permanent job losers remained at 1.39 million. The number of long-term unemployed was essentially unchanged and currently accounts for 25% of total unemployed. Median unemployment duration stayed constant at 7.5 weeks, a level far lower than what was seen earlier in the pandemic.
The overall unemployment rate held steady at the pandemic low of 3.6%. When broken down by demographic group, the unemployment rate increased for some groups while dropping for others. The unemployment rate for women, Hispanics, and Blacks fell while the unemployment rate for men, Asians, and teens increased. The unemployment rate for Whites was unchanged from March.
Compared to April 2021, unemployment rates are lower—often much lower—for every occupation category. Among service, sales & office, natural resources, construction and maintenance, and transportation and material moving occupations, unemployment rates are 2.2 to 3.9 percentage points lower than rates from February 2021. Jobless rates for these occupations categories are now between 3.4% and 6.1%.
The Leisure and Hospitality sector once again added the most jobs (78,000), accounting for almost one-fifth of total job gains. As in prior months, hiring in restaurants and bars made up the majority of job gains in this sector. The remainder of job gains were spread across a number of other sectors and were especially strong in Manufacturing, Transportation, and Warehousing as businesses tried to keep up with strong consumer demand. Together these two sectors added 107,000 jobs.
The pace of average hourly wage growth slowed slightly to 0.31%, down from 0.47% in March. On a year-over-year basis, wages are 5.5% higher, still below the pace of inflation. Wages in Mining and Logging increased the most, by $0.40 or over 1% from March to April.
Prices are up 0.3% from last month, a drop from the sharp 1.2% monthly increase in March. Compared to a year ago, prices are 8.3% higher. In March, prices were up 8.5% from a year ago. While still high, inflation may be easing. The slowdown in annual inflation is in part due to a drop in gas prices and partly because current prices are measured against prices from a year ago when inflation began to take off.
As the economy once again added over 400,000 jobs, the labor force declined by 363,000 workers in April, a sign that the labor market is cooling. The job market has made a remarkable recovery, but it is getting harder to get workers to come back to the labor market.
The drop in the labor force caused the labor force participation rate, the share of working-age Americans who are employed or looking for work, to decline to 62.2% in April, the first monthly drop in over a year. Among prime-age workers, 25 to 54 years old, the labor force participation rate also fell slightly to 82.4%. While increased wages have lured some workers back to the labor market, the rapid rise in inflation has made these higher wages less attractive. The labor force participation rates will be important to watch in the coming months to determine if the dips are an anomaly or trend.
U.S. job openings rose to a record 11.5 million in March. At the same time, quits also rose to record levels, as 4.5 million Americans voluntarily left their jobs. With 6 million unemployed workers in March, there were 1.9 job openings per unemployed worker. The demand for labor continues to be very strong, and the worker shortage combined with the drop in the labor force participation rate could drive up wages. These higher costs for businesses will be passed down to consumers through higher prices.
The April BLS jobs report shows that the U.S. job market continues to make steady progress. While job growth has slowed from the levels seen late last year and in early 2022, job gains continue to be strong. At the same time, the labor market appears to be cooling off. The unemployment rate, a low 3.6%, remains unchanged while wage gains slowed and the labor force participation rate dropped. At the same time, the worker shortage continues as labor demand remains high.
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