April Jobs Report: Job Market Making Steady Progress

The latest jobs numbers are out from the U.S. Bureau of Labor Statistics. What do they mean for job seekers, employers and investors? Here’s a quick take from Glassdoor Senior Economist Daniel Zhao.

The job market is making steady progress as record-high employer demand keeps job gains flowing. Employers added 428,000 jobs in April, unchanged from the 428,000 jobs added in March. The unemployment rate held at 3.6 percent, just above the pre-pandemic rate. Overall, the job market continues to log steady gains as employer demand remains sky high and workers flow back into jobs.

Payrolls on Track for Summer Recovery

Payroll employment rose 428,000 in April, marked the 12th month in a row where job gains exceeded 400,000. March's job gains were revised down slightly to 428,000 from 431,000. The U.S. job market is now only 1.19 million jobs short of pre-pandemic employment levels. So far in 2022, the U.S. has averaged 518,500 jobs added monthly, putting us on pace to hit pre-pandemic payroll employment by June.

The industries with the largest job gains were leisure & hospitality (+78,000 jobs), manufacturing (+55,000) and transportation & warehousing (+52,000). Job gains in April were less concentrated in leisure & hospitality and health care & social assistance, which have the largest remaining job shortfalls compared to pre-crisis levels.

Unemployment Holds at 3.6 Percent

The unemployment rate held at 3.6 percent in April, just barely missing the milestone of returning to pre-pandemic levels. The labor force participation rate also dipped slightly to 62.2 percent, down from 62.4 percent. The labor force participation drop reverses some of the gains from previous months, but is still trending upwards. The softness in labor force participation is a trend to watch, but ultimately, unemployment remains extremely low.

Wage Growth Moderates Slightly

Average hourly earnings rose 5.5 percent year-over-year in April, a slight deceleration from March when wage growth was 5.6 percent. The level of wage growth continues to remain hot as strong demand for workers keeps employers competing fiercely; though wage growth still remains below inflation levels. New research from Glassdoor shows that salary expectations from job seekers have surged in 2022. The increase in pay job seekers are expecting in their new jobs has surged 43 percent year-over-year in the first quarter of 2022, though the pace of the increase has slowed in early 2022 from the hot wage growth seen in summer 2021.

What's Coming Next

The job market is continuing to plow forward undeterred, buoyed by strong employer demand. Despite some indicators of cooling in April like the declining labor force participation rate and slowing wage growth, the job market is still nearing key recovery milestones as the unemployment rate reaches pre-pandemic levels and payroll employment is on track for a full recovery this summer. As the Federal Reserve raises rates, the labor market looks resilient with room to continue adding jobs even as conditions cool.

Tuesday's JOLTS report seemed to rebut concerns that the labor market was plateauing, with another new record high in job openings. Overall, the picture moving forward is of a job market cooling down, but today's jobs report gives more confidence that the recovery is resilient going into that slowdown.

More Insights

428,000 jobs added in April marks the twelfth straight month with job gains over 400,000. Gains are still steady, though it may be difficult to sustain that streak through 2022 as the job market cools.

We're still on track to recover to pre-pandemic employment levels this summer or a little over two years after the pandemic began, a staggering pace of recovery given the depth of the pandemic recession and fears of a repeat of the Great Recession.

March and April both saw 428,000 jobs added, but the job gains were more broad-based in April. Job gains were less concentrated in leisure & hospitality and instead we saw a rebound in transportation & warehousing after a surprisingly weak March.

On wages, average hourly earnings dipped slightly to 5.5 percent year-over-year. There's little evidence that wage growth is accelerating further, and today's report is more consistent with cooling or at least a plateau in employer demand at a high level.

Wage growth patterns over the last 3 months compared to the 3 months prior show a similar story of cooling in almost every sector. The exception is leisure & hospitality rebounding slightly from a weak winter, but still way down from the double-digit gains last year.

The unemployment rate was flat at 3.6 percent, married with a setback in labor force participation. The unemployment rate is a hair above pre-pandemic levels, but we don't want to see the unemployment rate fall due to discouraged workers leaving the labor force.

The unemployment rate for Hispanic/Latino workers dropped to 4.1 percent in April, just barely above the lowest rate on record (4.0 percent).

The Black unemployment rate dropped to 5.9 percent, shrinking the gap between Black and white workers to 2.7 percentage points, the smallest gap we've seen during the pandemic.

Not a cause for alarm, but a cause for concern: prime-age labor force participation did tick down, giving up some of the gains we'd seen in recent months. The overall trend is still positive, but certainly want to see a full recovery here.

And we may run into some headwinds on labor force participation as there are signs cropping up of another Omicron wave. Employee absences due to illness were up a touch in April, but a larger wave even half as large as this winter's would be extremely disruptive.

The share of workers teleworking part or full-time due to the pandemic fell to 7.7 percent. This data comes from a supplemental survey and its usefulness may be nearing an end. The question asks Americans whether they are working remotely "due to the pandemic", but much remote work nowadays is likely no longer "due to the pandemic" and instead just normal.