The number of non-farm employment in the United States increased by 428,000 in April, and an expected increase of 391,000, the smallest increase since September 2021.
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According to data from the U.S. Bureau of Labor Statistics, U.S. employment grew steadily in April, unemployment rate remained flat, and wage growth slowed down. However, the unexpected decline in labor participation rate may imply that the labor market will remain extremely tight.
data shows that the U.S. non-farm employment increased by 428,000 in April, basically the same as last month. As the size of the labor force declined, the unemployment rate remained at 3.6%, and the average hourly wage increased compared with March.
In contrast, the median forecast of Bloomberg's survey of economists showed that the employment population increased by 380,000 and the unemployment rate fell to 3.5%. After the release of
data, the 10-year benchmark US Treasury bond yield rose, the S&P 500 futures and Dow futures were close to turning higher, and the US dollar fell.
The steady growth in employment shows that labor demand remains strong. Vacancies and turnover rates have both returned to historical highs, and businesses are rushing to hire enough employees to meet resilient consumer needs. In addition, fierce competition among workers has quickly pushed up wages in recent months, but even so, many workers' incomes cannot keep up with inflation.
However, the report shows that wage growth may start to slow down. According to the data, the average hourly wage monthly rate is 0.3%, which is lower than economists' expectations, while the average hourly wage annual rate is 5.5%.
The continued slowdown in wage growth is good news for the Fed, as the Fed is trying to curb its fastest inflation in 40 years. Powell said Wednesday that the Fed hopes to ease demand for workers in a bid to slow wage growth and inflation “without having to slow economic growth, leading to a sharp rise in recession and unemployment.”
Labor participation rate unexpectedly dropped
In addition, it is worth noting that the labor force participation rate (the proportion of the population who are working or looking for a job) in April fell to 62.2%, the lowest level in three months, and the labor participation rate aged 25-54 also fell slightly. This complicates the Fed's efforts to align labor demand with supply.
This may be caused by a variety of factors, including care responsibilities for children and the elderly, which prevented participation rates from returning to pre-pandemic levels. But looking ahead, wages combined with rising prices of essential goods such as food and housing may bring more Americans back to the labor market.
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