The U.S. added 253,000 jobs in April, and unemployment dipped to 3.4%, according to the latest Employment Situation Summary from the U.S. Bureau of Labor Statistics.
The analysis found that along with the unemployment rate, the number of unemployed persons, at 5.7 million, changed little. The unemployment rate has ranged from 3.4% to 3.7% since March 2022.
In addition, the report saw job gains in professional and business services, healthcare, leisure and hospitality, and social assistance.
Key highlights:
- Leisure and hospitality added 31,000 jobs, mostly in food services and drinking places (+25,000). Leisure and hospitality had added an average of 73,000 jobs per month over the prior six months, and remains below its pre-pandemic February 2020 level by 2.4%.
- Employment in professional and business services continued to trend up (+43,000), with a gain of 45,000 in professional, scientific and technical services. Employment in professional and business services had increased by an average of 25,000 per month over the prior six months.
- Government employment increased by 23,000, under the average monthly gain of 52,000 over the prior six months. Overall, employment in government is below its pre-pandemic February 2020 level by 1.3%.
- Healthcare added 40,000 jobs compared with the average monthly increase of 47,000 over the prior six months. Job growth occurred in ambulatory healthcare services (+24,000), nursing and residential care facilities (+9,000), and hospitals (+7,000).
- 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.
- Average hourly earnings for all employees on private nonfarm payrolls rose by 0.5% to $33.36. Over the past 12 months, average hourly earnings have increased by 4.4%. Average hourly earnings of private-sector production and nonsupervisory employees rose by 0.4% to $28.62.
- Both the labor force participation rate (62.6%) and the employment-population ratio (60.4%) were unchanged in April. These both remain below their pre-pandemic February 2020 levels (63.3% and 61.1%, respectively).
Major takeaways:
MBA SVP and Chief Economist Mike Fratantoni commented:
“The job market stayed surprisingly strong in April with a gain of more than 250,000 jobs and a drop in the unemployment rate back to 3.4%. Job growth for the prior two months was revised downwards, but on net, the labor market is stronger than expected, including wage growth up 4.4% over the past year. This rate of growth is likely faster than would be consistent with the Federal Reserve’s 2% inflation target.
“As was the case in recent months, job growth remains concentrated in just a few sectors, particularly healthcare and hospitality. Although we have seen several public layoff announcements, the job growth in these few sectors continues to offset losses in technology and other industries, including the mortgage market.
“A solid job market will provide support to the housing market. However, the inflationary pressures from this strong wage growth will likely prevent the Federal Reserve from cutting rates anytime soon, even if they now are at the peak for this rate cycle.”
NAR Chief Economist Lawrence Yun commented:
“A record number of Americans are working, with another 253,000 net new job additions in April. Compared to the employment peak pre-pandemic, 3.2 million more people are working. The unemployment rate is super tight at 3.4%. Job openings are way above those searching for a job: 9.6 million job openings compared to 5.7 million people searching for one. Let’s be mindful, however, that employment is considered a lagging indicator and the last economic data to turn. Job openings are 20% lower compared to one year ago.
“The tight job market is partly due to the nearly 5 million Americans who were in the labor force before the pandemic but are no longer seeking employment. The 3.2 million net job additions over the past three years are averaging 1 million job creations per year, which is only about half of the normal annual job creation. Directionally, more jobs mean more housing demand. Given the many ‘help wanted’ signs, more jobs will be added in the upcoming months. Should more Americans enter the labor force, an even better outcome can be achieved as more supply will lessen inflationary pressure and lower the mortgage rate.”
Realtor.com® Chief Economist Danielle Hale commented:
“Today’s jobs report revealed a somewhat brisker pace of hiring in April than in March. Companies added 253,000 net new jobs and the unemployment rate slipped somewhat lower, to 3.4%–a level not seen since the summer of 1969. Nevertheless, this gain was somewhat slower than the 290,000 jobs added on average over the previous 6 months. Professional and business services, health care, leisure and hospitality, and social assistance sectors saw the largest job gains in April.
“In the May Fed meeting statement, in addition to announcing another quarter point increase in the Fed Funds rate, the committee removed guiding language about additional policy firming being necessary. In other words, they opened the door to the possibility of a pause in June. Today’s data is the first piece of additional evidence that will factor into June’s decision, and it certainly bolsters the case for those who expect there is still more for the Fed to do. Today’s job data won’t have the final say, but this information will raise market odds of another rate hike in June, at least until another piece of data contradicts it.
“In March, job openings fell to 9.6 million, the lowest level since April 2021. Despite this decline, there are still nearly two open jobs for every out-of-work job seeker, meaning the labor market remains tilted in favor of workers. With the number of unemployed workers dropping from 5.8 to 5.7 million in April, market balance is likely to continue to be friendly to job-seekers.
“A strong job market will boost earnings and household spending capacity, which is good for the housing market and broader economy. However, a too-strong market means the Fed has to tighten further, dampening that good news and running a higher risk of over-tightening. Today’s report falls a bit above expectations, and may undermine some of the early-week confidence that a pause in rate hikes is ahead. Fortunately, we have nearly another six weeks to go before the next Fed meeting in which we’ll see several more readings on the economy, inflation and the job market. For home shoppers, this could mean somewhat higher mortgage rates ahead. But perhaps more importantly for homebuyers and sellers, the labor market continues to support income-earning and consumer confidence, two necessary ingredients for home sales to occur.”
For the full report, click here.
