April Jobs Report: Reduce Heat to a Simmer
Aaron Terrazas
Chief Economist at Glassdoor | May 4, 2024
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’s Chief Economist Aaron Terrazas.
The U.S. labor market cooled more than expected in April, with payroll gains slowing to 175,000 from 315,000 in March (revised up from 303,000) and the unemployment rate ticking 0.1 percentage point higher to 3.9%. In recent months it has been a safe bet to skew optimistic ahead of the monthly jobs report. April was the exception that, many hope, will make a trend.
- Payroll employment grew by 175,000 in April, well below the consensus forecast of 240,000 job gains. However, March’s already strong number was revised higher too.
- Job gains were led by healthcare, government and social services; there was surprising weakness in the food service industry, which had held steady through much of 2023.
- The unemployment rate ticked higher to 3.9% from 3.8% – a total of 63,000 more unemployed workers – despite a flat participation rate. The increase was driven by workers who lost their jobs taking longer to find new jobs.
- Average hourly earnings cooled to 3.9% down from 4.1% in March and the slowest pace in three years. The slowdown has been sharper for frontline production workers: A year ago, hourly earnings were growing at 7.0% on an annual basis; now they are growing by 4.0%.
In isolation, today’s jobs report eases fears – sparked by stubbornly high inflation data in recent weeks – that the interest rate hiking cycle has not yet reached its apex. But confidence in the trend unfolds one data point at a time. Absent more definitive evidence of cooling in both wages and inflation, the suggestion that today’s data would justify interest rate cuts is still highly speculative.
There are clear fractures beneath the surface of the labor market, and a growing consensus that job opportunities are meaningfully softer for some sectors and for some workers. Hiring continues to be driven by healthcare, the public sector, and social services – sectors where hiring tends to be either independent of or inversely related to the overall health of the economy. The number of part-time workers who would prefer full-time work reached its highest level since November 2020.
Since the trough in the unemployment rate almost exactly a year ago, the number of unemployed workers has now been increasing on an annual basis for 12 consecutive months. Going back to the 1940s, there has never previously been as prolonged a stretch of small but steady annual increase in the number of unemployed workers that did not precede or coincide with a broader recession. Perhaps the closest analogue is the mid-1980s – a period of stable but unspectacular economic performance.
After the tumult of the past half decade, a stable but unspectacular economy may well be welcome news for many firms and many workers.
Aaron Terrazas
Aaron Terrazas is chief economist at Glassdoor. He oversees the Glassdoor Economic Research program, providing research, analysis and commentary on today’s evolving workplace and fast-changing labor market. Previously, Aaron served as the director of economic research at the trucking startup Convoy, and served in a similar role at the real estate marketplace Zillow. He started his career as an economist in 2012, supporting the work of the Deputy Assistant Secretary for Macroeconomic Analysis at the United States Treasury Department, and also worked as an analyst on immigration and labor markets at the the non-partisan Migration Policy Institute. He was educated at The Johns Hopkins University and at Georgetown University.
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