Unemployment Rate Dips Further to 3.4%
New employment in April accounted for 253,000 positions, ahead of the revised numbers for the two previous months, which shifted downward by a combined 149,000 jobs. Net numbers are now 248,000 for February and 165,000 for March.
The leisure and hospitality, healthcare, and professional and business services sectors continued to gain jobs in April. The social assistance sector saw a bump in job creation as well.
The unemployment rate moved from 3.5% in March to 3.4% in April.
With an increase in monthly compensation of 0.5%, the average hourly increase over the previous 12 months rose to 4.4% in April.
The average work week remained steady at 34.4 hours for the month.
Temporary Job Trends:
The temp sector continued to shed jobs, losing 23,000 in April.
What Does It All Mean?
Viewed in isolation, the April employment report offers a clear picture of labor market strength. Given recent trends, however, it sends more mixed signals about the overall health of the economy. Although jobs growth was strong, it appears to be slowing over recent months, even as unemployment continues to trend down.
Compensation levels rose again this past month, but how effective are these pay gains against persistently high inflation? As borrowing rates continue to rise, business investment typically slows, leading to labor market weakness, driven by less hiring and more layoffs.
On a more positive note, a slowdown in hiring activity translates to less competition for talent. While it is still a challenge to fill positions, there is more talent available in the market, as evidenced by the recent shift from 1.9 jobs for every worker to 1.6 jobs for every worker.
As the economy nears a point at which pandemic job losses are eliminated as the workforce returns to full strength, it’s important to keep in mind that many people who re-entered the workforce did so in different positions and even different industries than where they worked pre-pandemic. That redistribution of jobs and workers must be taken into account as employers craft hiring strategies to attract new talent. While it exacerbates recruiting challenges on one hand, it creates opportunities for innovative thinking on the other.
Sources: U.S. Bureau of Labor Statistics (BLS), CNBC, CNN, FOX Business, Staffing Industry Analysts, American Staffing Association, Bloomberg, The New York Times, The Washington Post