US Job Market Remains Resilient: April Payrolls Expected to Show Steady Growth

The US labor market is expect, jobs, report to continue its strong pace in April, with nonfarm payrolls projected to increase by 243,000, according to a Dow Jones consensus. This would be a slight decrease from the average 276,000 jobs created per month so far in 2024, but still a healthy total. The unemployment rate is forecast to remain steady at 3.8% for the 27th consecutive month, marking the longest streak with a jobless rate below 4% since the 1960s.

Why this matters: The labor market's resilience has a direct impact on consumer spending and overall economic growth, making it a vital indicator of the economy's health. A steady job market and low unemployment rate can also influence the Federal Reserve's monetary policy decisions, which can have far-reaching effects on the economy. A steady job market and low unemployment rate can also influence the Federal Reserve's monetary policy decisions, which can have far-reaching effects on the economy.

Despite the anticipated slowdown in job growth, the April figures would still be more than double what economists estimate is required to sustain the current low level of jobs, unemployment, economy, federal. "The April jobs report will likely point to a cooling labor market with some moderation in employment gains, though job creation should remain vigorous," said Lydia Boussour, senior economist at EY.

Wage growth is also expected to moderate slightly in April, with average hourly earnings projected to rise 0.3% over the prior month, matching March's increase. On a year-over-year basis, wages are forecast to climb 4%, just below the 4.1% seen in March. However, Bank of America analysts caution that wage growth could come in faster than jobs, report, job, gains, set, unemployment, holds due to California's new law that raised the minimum wage for fast food workers by $4 to $20 an hour.

The Federal Reserve is closely watching the labor market and wage trends as it assesses the path of inflation and the impact of its aggressive rate hikes over the past year. While inflation has cooled from its peak of 9.1% in June 2022 to 3.5% in March, it remains above the central bank's 2% target. Fed Chair Jerome Powell noted that wage pressures have eased but suggested that further moderation in job and wage growth would be welcome.

"Inflation has eased substantially over the past year while the labor market has remained strong, and that's very good news," Powell said. However, he cautioned, "If we did have a path where inflation proves more persistent than expected, and where the labor market remains strong but inflation is moving sideways, and we're not gaining greater confidence, that would be a case in which it could be appropriate to hold off on rate cuts."

Economists are closely watching key sectors like health care, leisure and hospitality, education, manufacturing, and warehousing for signs of continued strength or emerging weakness. Health care has been a standout, adding around 240,000 jobs so far in 2024, while leisure and hospitality contributed 89,000 jobs, report, expected, show, labor, market in March. Seasonal trends are expected to boost education, manufacturing, and warehousing in the coming months.

"There are definitely still tailwinds left," said Amy Glaser, senior vice president of business operations at Adecco. "The name of the game is steady Eddie as resiliency continues and then we're looking forward to some of the seasonal trends we would expect going into the summer."

Labor Department preparations for the release of the April jobs report on Friday, May 3, will prompt economists and policymakers to closely parse the data for signs of where the economy is headed. While a slight cooling in job growth and wages would be a welcome development for the inflation fight, a significant slowdown could raise concerns about the durability of the expansion. For now, the labor market remains a bright spot, underpinning solid consumer spending and overall economic growth.

Key Takeaways

• US labor market expected to add 243,000 jobs in April, a slight decrease from previous months.
• Unemployment rate forecast to remain steady at 3.8% for the 27th consecutive month.
• Wage growth expected to moderate, with average hourly earnings rising 0.3% over the prior month.
• Federal Reserve closely watching labor market and wage trends to assess inflation and rate hikes.
• Labor market remains a bright spot, underpinning solid consumer spending and overall economic growth.