Total nonfarm payroll employment increased by 428,000 in April, relatively unchanged from the 431,000 jobs added in March, according to the latest jobs report from the U.S. Bureau of Labor Statistics. The unemployment rate was unchanged from March at 3.6%.
“There are a lot of mixed messages in the economy today, but one message that is crystal clear is that the labor market remains healthy,” says Zonda chief economist Ali Wolf. “The economy added 428,000 jobs in April, with many of those gained in the leisure and hospitality sector.”
Doug Duncan, chief economist at Fannie Mae, says job gains in the prior two months were revised downward by a total of 39,000, the first such downward revision since June 2021. Total nonfarm payrolls remain 1.2 million from pre-pandemic levels in February 2020.
The number of unemployed individuals was relatively unchanged from March at 5.9 million. Both the unemployment rate and the number of unemployed individuals remain similar to their February 2020 levels (3.5% and 5.7 million, respectively).
“Employers are still finding it difficult to find the right people to hire,” Wolf says. “As a result, employees remain in the driver’s seat of today’s economy with rising wages and increased job prospects.”
Labor force participation decreased by 0.2 percentage points in April as 363,000 workers left the labor market.
“Average hourly earnings grew at a 5.5% year-over-year pace, roughly in line with last month’s report,” says Duncan. “While wage growth is a clear signal that firms are looking to hire, it could exacerbate the inflationary pressures already present in the economy.”
Among the unemployed, the number of permanent job losers remained at 1.4 million in April, and the number of persons on temporary layoff was little changed at 853,000, according to the Bureau of Labor Statistics.
The number of long-term unemployed individuals was little changed at 1.5 million, but the count remained 362,000 higher than in February 2020. The long-term unemployed accounted for 25.2% of all unemployed persons in April.
The number of persons not in the labor force who currently want a job was little changed at 5.9 million in April. The measure stands above its February 2020 level of 5 million. The number of discouraged workers, a subset of marginally attached workers who believe that no jobs are available for them, increased from 373,000 in March to 456,000 in April.
According to the Household Survey Supplemental Data, the share of employed persons who teleworked in March due to the pandemic decreased from 10% in March to 7.7% in April. During April, 1.7 million individuals reported that they had been unable to work because their employer closed or lost business due to the pandemic, down from 2.5 million in the previous month. Among those not in the labor force in March, 586,000 were prevented from looking for work due to the pandemic, down from 874,000 in March.
Duncan says the rate of growth for jobs in the residential construction sector decelerated from March. According to Duncan, the jobs report is not likely to alter the Federal Reserve’s plan to continue to raise the policy rate multiple times over the coming months.
“More growth will be needed in this sector to ease supply constraints in the housing market,” Duncan says. “It is important to note that a typical housing market response to rapidly rising rates is a slowdown in construction, so this employment segment bears watching."
