US Economy Adds 253,000 New Jobs in April, Unemployment Rate Ticks Lower
The U.S. economy added 253,000 new jobs in April, up from a downwardly revised 165,000 in March, according to the Bureau of Labor Statistics (BLS). This was higher than the market estimate of 180,000.
The unemployment rate edged lower to 3.4 percent, down from 3.5 percent and below economists’ expectations of 3.6 percent.
Average hourly earnings rose to 4.4 percent year-over-year, slightly higher than 4.3 percent in March. On a monthly basis, average hourly earnings climbed 0.5 percent, up from 0.3 percent.
Average weekly hours were unchanged at 34.4. The labor force participation rate was also flat at 62.6 percent.
Employment gains were broad-based, led by professional and business services (43,000), health care (40,000), leisure and hospitality (31,000), financial activities (23,000), and government (23,000).
“Employment was little changed over the month in other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, and other services,” the BLS reported.
Eric Winograd, the chief economist and strategist at AllianceBernstein, told Morningstar that employment growth below 100,000 would be considered “weakening.” He does not see job losses until the second half of 2023.
“Though jobs growth has already started to slow, we haven’t seen job losses yet,” Winograd says. “As we move into the second half of the year, we will see some negative months, but the data suggests we’re still a long way from that.
The U.S. labor market has sent mixed signals since the beginning of the year.
Mixed Data
After two strong job reports in January and February, conditions had ostensibly cooled. There have been more layoffs, a decline in job openings and quits, slowing wage growth, and tighter credit conditions forcing employers to prioritize.
This past week, the employment data offered different indicators.
Employment levels in the manufacturing sector, for example, might have rebounded in April, according to the Institute for Supply Management’s (ISM) Purchasing Managers’ Index (PMI). The sub-index touched expansion territory for the first time since January, rising from 46.9 to 50.2.
Tech layoffs might have also eased in April. The monthly Challenger job cuts data showed that retail led all industries with nearly 15,000 layoffs, topping the technology sector (11,553).
Moreover, labor costs unexpectedly surged in the first quarter, BLS data showed on May 4. Unit labor costs advanced to 6.3 percent in the January-to-March period, up from 3.3 percent in the fourth quarter and higher than the market estimate of 5.5 percent. Plus, non-farm productivity tanked 2.7 percent, down from 1.6 percent in the previous three months.
As credit conditions continue to tighten in the fallout of the Silicon Valley Bank, Signature Bank, and First Republic failures, the U.S. labor market might still be absorbing economic conditions.
