US Economy Adds 253,000 New Jobs in April, Unemployment Rate Ticks Lower

US Economy Adds 253,000 New Jobs in April, Unemployment Rate Ticks Lower
A 'now hiring' sign in a Manhattan store in New York City on May 6, 2022. (Spencer Platt/Getty Images)
Andrew Moran
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.

Employment gains were revised down for February by 78,000 to 248,000 and changed downward for March by 71,000 to 165,000.

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, chief economist and strategist at AllianceBernstein, told Morningstar that employment growth below 100,000 would be considered “weakening.”

“Though jobs growth has already started to slow, we haven’t seen job losses yet,” Winograd said. “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.

Pedestrians walk by a "Now Hiring" sign outside a store in Arlington, Va., on Aug. 16, 2021. (Olivier Douliery/AFP via Getty Images)
Pedestrians walk by a "Now Hiring" sign outside a store in Arlington, Va., on Aug. 16, 2021. (Olivier Douliery/AFP via Getty Images)

The number of people working two or more jobs remained elevated at 7.707 million. The number of individuals employed part-time for economic reasons was little changed at 3.9 million. The number of people not in the labor force but who want a job surged by 346,000 to 5.3 million.

The revisions signal that the national labor market might not be as strong as what has been reported, according to EJ Antoni, research fellow of regional economics at the Center for Data Analysis at The Heritage Foundation.

“These revisions are turning beats into misses, revealing that payroll gains have been weaker than expected, not stronger. The weakness in the labor market is expressed not only in the slowdown of hiring but also real earnings growth, which has been negative,” he told The Epoch Times.

Real wage growth (inflation-adjusted) was also likely negative in April, Antoni said.

“That means people got paid more but could afford less, which does not sound like a strong labor market, but a desperate one,” he noted.

Still, after the jobs data, financial markets were hovering in positive territory in pre-market trading, with the leading benchmark indexes up about 0.4 percent.

The U.S. Treasury market was mostly positive across the board, with the benchmark 10-year yield adding nearly 10 basis points to about 3.45 percent.

The U.S. Dollar Index, a measurement of the greenback against a basket of currencies, rose by 0.3 percent to above 101.70.

“April delivered another month of jobs results that beat economists’ expectations as the labor market remains resilient,” said Cody Harker, head of data and insights at recruitment marketing firm Bayard Advertising. “Despite a general cooling trend, the market pushes forward once again, driven by solid momentum in COVID-sensitive verticals and continued consumer spending on services.”

So, what does this mean for the Federal Reserve?

Strong wage growth and lower joblessness offer the central bank more flexibility in its tightening cycle, market experts say.

“It has been the one major sticking point in the Fed’s inflationary battle as unemployment remains at historical lows. While it tends to be a lagging inflationary signal, it is important for the Fed to see the labor market cool—now more than ever,” Jay Woods, chief global strategist at Freedom Capital Markets, said.

Despite a resilient NFP report, Bryce Doty, senior vice president and senior portfolio manager at Sit Investment Associates, said he doesn’t think this report signals an economy “in great shape.”

“People are going back to work because they have burned through their savings,” he said. “Companies may finally be able to fill positions that have been open for a long time. This report should not be mistaken for an economy in great shape given the recent string of poor economic data and looming credit crunch.”

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 Purchasing Managers’ Index. The sub-index touched expansion territory for the first time since January, rising to 50.2 from 46.9.
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, nonfarm 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.

Andrew Moran has been writing about business, economics, and finance for more than a decade. He is the author of "The War on Cash."
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