After adding an average of more than 270,000 jobs per month through the first quarter of the year, job growth cooled in April, with 175,000 jobs added, according to the U.S. Bureau of Labor Statistics.
“This is exactly the kind of jobs report we would hope for. The word ‘overheating’ started to crop back into Fed speak over the past few months as stronger-than-expected job growth and inflation made policymakers worried,” Zonda chief economist Ali Wolf says.
The unemployment rate in April was 3.9% and has remained between a range of 3.7% and 3.9% since August. The number of unemployed people was little changed in April at 6.5 million.
“The inflation data is still running hot, but today’s report will at least quell the fears over a broad-based economic pickup,” Wolf says. “This is important because if the economy started running too hot again, Fed rate hikes would be back on the table.”
Gains in employment in April were led by the health care (+56,000), social assistance (+31,000), transportation and warehousing (+22,000), and retail trade (+20,000) sectors.
Construction employment changed little in April (+9,000) following an increase of 40,000 in March. Over the prior 12 months, construction has added an average of 22,000 jobs per month.
Additionally, the BLS reported February employment gains were downwardly revised to 236,000 from 270,000; the change in March employment was upwardly revised to 315,000 from 303,000.
“For the housing industry, bond investors acted as expected. The more moderate jobs report put a little downward pressure on mortgage rates to start the day,” Wolf says.
In April, the number of long-term unemployed was essentially unchanged at 1.3 million. The long-term unemployed accounted for 19.6% of all unemployed people.
Of those not in the labor force who wanted a job, the number of people marginally attached to the labor force was little changed at 1.6 million in April. These individuals were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the four weeks preceding the Household Survey.
The labor force participation rate held steady at 62.7% in April, and the employment-population ratio was little changed at 60.2%. Average hourly earnings for all employees increased by 0.2% to $34.75 month over month. Over the past 12 months, average hourly earnings have increased by 3.9%.
