• US non-farm payroll employment rose 175k in April
   
• Revisions to the two prior months were lower, subtracting 22k from the previously reported figures

• Unemployment rate ticks up to 3.9%

• Average hourly earnings increased by 0.2% MoM, 3.9% YoY

• Labor force participation held steady at 62.7%

• April’s job numbers boost expectations of a September rate cut  

The employment situation reports for April kicked off the second quarter with signs that the labor market is cooling. Nonfarm payrolls increased by 175,000 in the month, below consensus expectations for a 240,000 gain. Job gains in the two prior months were also revised lower with the change in total nonfarm payroll employment for February was revised down by 34,000, from 270,000 to 236,000, and the change for March was revised up by 12,000, from 303,000 to 315,000. With these revisions, employment in February and March combined is 22,000 lower than previously reported.

Private payrolls rose 167k, with nearly half of April’s employment gains were in the health care and social assistance sector, which has been a key driver of job gains. The remaining job growth was fairly broad-based across other industries. The gains concentrated in health care & social assistance (87k), transportation & warehousing (21.8k) and retail trade (20.1k). While job growth picking up in manufacturing (8K), however, elsewhere the picture was underwhelming. Higher-wage industries also struggled to add jobs with payrolls in information (-8k), professional & business services (-4k) and mining & logging (-3k) all shed jobs last month. Government hiring slowed considerably, adding just 8k jobs last month – well below the 62k averaged over the prior three months.

The unemployment rate ticked higher to 3.9% in April and marks the 27th consecutive month that the jobless rate has held under 4%, matching a streak last seen in the late 1960s. The labor force participation rate held steady at 62.7% Average hourly earnings were up 0.2% MoM and rose 3.9% YoY.

Source: BIMB Securities Research - 7 May 2024