US Job Report Strong in April, Led by Gains in Manufacturing and Leisure & Hospitality
Total nonfarm payroll employment remained strong in April, increasing by 428,000 and beating analysts’ estimates, the Bureau of Labor Statistics (BLS) reported on May 6. Job growth was widespread, led by gains in leisure and hospitality, manufacturing, and transportation and warehousing.
Economists surveyed by The Wall Street Journal estimated that 400,000 jobs were created in April and that the unemployment rate fell to 3.5%.
The unemployment rate was unchanged at 3.6%, the BLS said.
Jeanniey Walden, CMO at DailyPay, told GOBankingRates that after a historic two-year labor market recovery, this morning’s jobs report is our third data point this week that we have reached the limits of full employment. She also highlighted three themes in the report.
“First, job participation has plateaued at 62.2%, failing to deliver the much-needed labor supply employers need to fill open positions. Second, hourly earnings increased less than expected at 0.3% and declined when accounting for inflation, providing further pressure on front-line workers who are already stretched financially. And third, work is officially in-person again, with teleworking hitting a post-pandemic low of 7.7%, less than half the level it was a year ago,” she said. “When you put all this together, you have the Rodney Dangerfield of labor markets, respected by neither employers nor workers. No wonder more firms are deploying cutting-edge technology solutions to activate their workforces and provide financial benefits that more than offset real wage declines.”
The BLS noted that in April, 7.7% of employed persons worked remotely because of the coronavirus pandemic, down from 10% in the prior month.
Jeffrey A. Rosenkranz, portfolio manager at Shelton Capital Management told GOBankingRates that “this morning’s employment report is a mixed bag and unlikely to change the tack of Fed policy in the near term. Job gains were solid and wage growth of 0.3% was slightly below expectations, but the previous month was revised slightly higher.”
He added, however, that participation was disappointing and the supply of labor “is something the Fed is keenly focused on.”
Rosenkranz said that “50bp rate increases are already baked-in for the next 2 meetings. This report on its own will do nothing to move them off that path, and we will need to watch these measures of labor supply and demand over the coming weeks and months for evidence of a cooling of the labor market which would allow the Fed to slow the trajectory of rate hikes. As it relates to stagflation concerns, the solid job gains should assuage these fears for the moment, but large company employment strength is diverging from the weakness in small businesses, who are often the leading indicators in a slowing economy and labor market.”
In April, employment in leisure and hospitality increased by 78,000, with job growth continuing in food services and drinking places (+44,000) and accommodation (+22,000). Employment in the sector is still down by 1.4 million, or 8.5%, since February 2020, the BLS noted.
The manufacturing sector added 55,000 jobs in April, while employment in transportation and warehousing rose by 52,000.
Additional sectors which saw growth in March include professional and business services, financial activities, health care, retail trade and wholesale trade employment.
Cody Harker, Senior Director of Strategy and Insights at recruitment marketing company Bayard Advertising, said that today’s job report indicates that the U.S. labor market is still red-hot and now matches its pre-pandemic level.
“The market remains more of a job seeker’s market, but with the rise of inflation and the increased cost of living, higher/fairer pay is top of mind for employees. We are seeing a majority of workers leaving and switching jobs in search of higher wages and better cultural perks in order to keep up with inflation,” he added.