Employment growth in the United States is expected to have slowed in April, as the positive effect of milder weather conditions and the return of striking workers fades. This slowdown is expected to be reflected in the non-farm payroll numbers for the month, with an expected increase of 62,000 jobs. The unemployment rate is expected to remain stable at 4.3%, but may be rounded down to 4.2%.
According to economists, the slowdown in employment growth does not signal a significant change in labor market conditions. The Labor Department’s employment report, to be released on Friday, is also expected to show an acceleration in wage growth last month. This would strengthen market expectations that the Federal Reserve will maintain its interest rates unchanged until 2027.
Analysts attribute the sluggish labor market to various factors, including trade policies, immigration policies, and recent geopolitical tensions. The impact of the conflict between the United States and Israel is yet to be fully realized. Economists describe the current labor market situation as a “slow hire, slow fire zone.”
The report is expected to show a modest increase of 62,000 non-farm payroll jobs in April, following a rebound of 178,000 in March. The volatility in job numbers has been attributed to adjustments in the government’s model for estimating job creation due to business openings and closures.
Weather conditions, strikes, public sector job cuts, and changes in the labor force due to immigration policies have also contributed to the job market volatility. Economists recommend looking at a three-month average of employment figures for a clearer picture of the labor market.
In terms of sectors, healthcare and social assistance have likely continued to lead job growth, reflecting the aging population. However, growth in these sectors has slowed. Rural and urban hospitals have faced challenges, particularly with the rising costs of visas for immigrant healthcare professionals.
The manufacturing sector is expected to have seen further increases in employment, driven by rising prices and supply shortages due to geopolitical tensions. On the other hand, public sector employment is expected to decline as the government aims to reduce its footprint.
Wage growth is expected to accelerate, with average hourly earnings likely to have increased by 0.3% in April. This would bring the annual wage growth to 3.8%. However, some economists point out that this increase may be partly due to shorter working hours.
Overall, while the labor market appears stable on the surface, underlying economic issues such as inflation and income inequality persist. Economists suggest that the economy is reliant on high-income households, while low-income households struggle to make ends meet.
