April Jobs Report: Assessing Growth
Employment increased by 428,000 in April, with the unemployment rate remaining unchanged at 3.6 percent, as reported recently by the U.S. Bureau of Labor Statistics. The report detailed job growth in a number of areas, led by leisure and hospitality, manufacturing, and transportation and warehousing.
This comes just as news about inflationary pressures are driving the headlines: inflation reached 8.3%, but slowed a bit from last month’s high. With these job gains come good signs for our economic recovery from the pandemic:
- The economy has regained 95% of the 22 million jobs that were lost at the height of the pandemic.
- Consumers continue to show a strong desire to travel and stay in hotels, reviving the tourism industry.
- While a tight labor market is challenging for employers, employees are realizing greater mobility and great salaries to boot.
Industry-specific highlights of the jobs report
- Employment in leisure and hospitality led the job gains with an increase of 78,000 jobs in April. Job growth continued in food services and drinking places (+44,000) and accommodation (+22,000).
- Manufacturing added 55,000 jobs in April. Employment in durable goods rose by 31,000, with gains in transportation equipment (+14,000) and machinery (+7,000). Nondurable goods added 24,000 jobs, with job growth in food manufacturing (+8,000) and plastics and rubber products (+6,000).
- Employment in transportation and warehousing rose by 52,000 in April. Within the industry, job gains occurred in warehousing and storage (+17,000), couriers and messengers (+15,000), truck transportation (+13,000), and air transportation (+4,000). Employment in transportation and warehousing is 674,000 above its February 2020 level, led by strong growth in warehousing and storage (+467,000) and in couriers and messengers (+259,000).
- In April, employment in professional and business services continued to trend up (+41,000).
- Financial activities added 35,000 jobs in April, led by a gain in insurance carriers and related activities (+20,000). Employment also rose in nondepository credit intermediation (+6,000) and in securities, commodity contracts, and investments (+5,000).
- Health care employment rose by 34,000 in April, reflecting a gain in ambulatory health care services (+28,000). Employment in health care is down by 250,000, or 1.5 percent, since February 2020.
- Employment in retail trade increased by 29,000 in April. Job gains in food and beverage stores (+24,000) and general merchandise stores (+12,000) were partially offset by losses in building material and garden supply stores (-16,000) and health and personal care stores (-9,000).
What Economic Challenges Do Employers Face Now?
Here are some of the major concerns we hear from employers:
- Shortages of qualified workers: employers are still struggling to find and hire qualified workers. At the top end of the labor force, talented workers have a number of choices.
- Supply Chain Issues: the pandemic caused widespread economic impacts that are still being felt in the supply chain, where shortages of goods and labor can have ripple effects on certain industries across the globe.
- Wage inflation: workers are increasingly expecting salary bumps to go with the increase cost of living brought on by inflation in the larger economy.
What are some economic signs that will affect employment through the rest of the year?
- Lack of consumer confidence: A recent Gallup poll showed that 46% of Americans rated their personal finances positively, down from 57 percent last year. This survey also showed that average hourly earnings were up 5.5%, which lags behind the inflation rate of 6.6%, leaving some families feeling the pinch of inflation.
- Inflation: Last but certainly not least is the issue of inflation, which has been partially driven by topsy-turvy economic factors that were a part of pandemic life. Last week the Fed said that it would its benchmark interest rate by half a percentage point, and showed signs of wanting to increase the rate even further in the coming year. Some economists predict that job creation will slow as businesses react to inflation and the increased cost of borrowing.
What’s In the Future?
Economists expressed confidence in the continuing economic recovery, despite inflationary signals:
- Hiring is continuing to be robust: even if hiring slows a bit from its blockbuster rate, economist expect hiring to continue.
- Employers have thus far not shown signs of slowing down during the recovery.
Catch Up With Previous Jobs Reports
- March’s strong growth
- February’s blockbuster growth
- January’s strong growth despite Omicron
- Promising news for hospitality in December
- November’s mixed picture
- October’s robust gains
- A slower-than-expected report in September
- The summer‘s roaring recovery trajectory
- Better than expected growth in June, especially in travel
- Strong signs of recovery in May
- An anemic April jobs report