US Job Growth Slowed as Unemployment Rising

The market had expected the April report released Friday to show nonfarm payrolls rise 243k new jobs which it missed with 175k new jobs. Job growth slowed and unemployment turned higher, a break from a stretch of data showing surprising strength in the labor market. The slowing in job gains is consistent with private sector job growth slowing steadily as we have seen in the sustained rollover in NFIB hiring intentions. With eyes on wage inflation earnings also rose less than anticipated helping treasury yields lower after the report. Slower wage growth also saw Fed Funds futures raise the chances of a rate cut in September to 78% from 63% just before the release.

The volatile numbers point up how difficult estimating the jobs situation is amid an economy struggling in some segments and states. The unemployment rate rose to 3.9% (consensus 3.9%) from 3.8% in March. Job growth in April was led by faster hiring in health care, and social assistance. Leisure and hospitality jobs have now bounced back above its pre-pandemic level.

Working

April 2024 US Employment Report

US Jobs Report

Employment

  • Change In Nonfarm Payrolls Apr: 175K (est 243K; prevR 315K)
  • Unemployment Rate Apr: 3.9% (est 3.8%; prev 3.8%)
  • Two-month net revision -22K vs +22K prior
  • Labour Force Participation Rate Apr: 62.7% (est 62.7%; prev 62.7%)
  • Change In Private Payrolls Apr: 167K (est 195K; prev 232K)
  • Underemployment Rate Apr: 7.4% (prev 7.3%)
  • Change in private payrolls Apr: +167K vs +190K expected
  • Change In Manufacturing Payrolls Apr: 8K (est 5K; prev 0K)
  • Household survey Apr: -25K vs +498K prior

Earnings

  • Avg Hourly Earnings (M/M) Apr: 0.2% (est 0.3%; prev 0.3%)
  • Avg Hourly Earnings (Y/Y) Apr: 3.9% (est 4.0%; prev 4.1%)
  • Avg Weekly Hours All Employees Apr: 34.3 (est 34.4; prev 34.4)

Market Reaction

Dow Industrial Average rose 450.02 points or 1.18% at 38675.69
S&P index rose 63.61 points or 1.26% at 5127.80
NASDAQ index rose 315.37 points or 1.99% at 16156.33
The 10-yr note yield declined seven basis points today, and 17 basis points this week, to 4.50%.
The 2-yr note yield declined seven basis points today, and 19 basis points this week to 4.81%.
Crude oil widened this week’s loss to nearly 7.0%. WTI crude oil futures settled 1.1% lower at $78.05/bbl. The S&P 500 energy sector is down 0.6%.
Gold futures settled $1 lower (flat) to $2,308.60/oz, sliding -1.6% this week.
U.S. Dollar Index fell 0.3% to 105.04, giving up 1.0% for the week.

Where the Jobs Were:

  • Healthcare sector saw an increase of 56,000 jobs in April, with gains reported in ambulatory health care services (+33,000), hospitals (+14,000), and nursing and residential care facilities (+9,000).
  • Social assistance employment levels also rose by 31,000, primarily driven by gains in individual and family services (+23,000).
  • Transportation and warehousing sector added 22,000 jobs, with notable increases in couriers and messengers (+8,000) and warehousing and storage (+8,000
  • Employment showed little or no change in other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; transportation and warehousing; information; financial activities; and professional and business services

The US economy added 175,000 jobs in April 2024, a deceleration compared to the upwardly revised 315,000 jobs added in March and falling short of market expectations for a 243,000 increase. The latest data underscores a significant slowdown from the brisk pace observed in the first quarter and trails behind the average monthly gain of 242,000 jobs over the preceding 12 months.

United States Non Farm Payrolls

Private Jobs

The US private sector added 167,000 jobs in April 2024, a deceleration compared to the upwardly revised 243,000 jobs added in March and falling short of market expectations for a 190,000 increase. Nonfarm Payrolls Private in the United States averaged 106,630 from 1939 until 2024, reaching an all-time high of 458,200 in June of 2020 and a record low of -1,956,0000 in April of 2020

United States Nonfarm Payrolls - Private

Government Jobs

Government Payrolls in the United States increased by 8k in April 2024, following an upwardly revised 72k rise in the previous month. This was lower than the average monthly gain of 55,000 over the prior 12 months. Over the month, employment increased in state government (+6,000) and federal government (+2,000)

United States Government Payrolls

Manufacturing Jobs

Manufacturing Payrolls in the United States were unchanged in March 2024, missing market forecasts of a 5k rise, following a downwardly revised 10k decrease in the prior month. Manufacturing Payrolls in the United States averaged 3.8k from 1939 until 2024, reaching an all-time high of 655k in April of 1946 and a record low of -1715k in September of 1945

United States Manufacturing Payrolls

 Wages

  • In April, average hourly earnings for all employees on US private nonfarm payrolls edged up by 7 cents, or 0.2%, to $34.75, after a 0.3% increase in the prior month and below market estimates of a 0.3% rise.
  • In April, average hourly earnings of private-sector production and nonsupervisory employees edged up by 6 cents, or 0.2%, to $29.83.
  • Over the past 12 months, average hourly earnings have increased by 3.9% in April, the least since June 2021, after a 4.1% advance in March and slightly below market estimates of a 4% increase.
United States Average Hourly Earnings MoM

Avg. Hourly Earnings

  • Average hourly earnings for all employees on US private nonfarm payrolls have increased by 3.9% over a year in April 2024, following a 4.1% rise in March and slightly below market estimates of a 4% increase.
  • It was the slowest growth in average hourly earnings since June 2021.
United States Average Hourly Earnings YoY

 Hours

  • The average workweek for all employees on US private nonfarm payrolls edged down by 0.1 hour to 34.3 hours in April 2024, compared to market estimates of 34.4 hours.
  • In manufacturing, the average workweek was unchanged at 40.0 hours, and overtime was also unchanged at 2.9 hours.
  • The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by 0.1 hour to 33.7 hours
United States Average Weekly Hours

Household Survey Data

Both the unemployment rate, at 3.9 percent, and the number of unemployed people, at 6.5 million,
changed little in April. The unemployment rate has remained in a narrow range of 3.7 percent to 3.9
percent since August 2023.

Among the major worker groups, the unemployment rate for adult men (3.6 percent) increased in
April. The rate for Blacks (5.6 percent) decreased, offsetting an increase in the prior month. The jobless
rates for adult women (3.5 percent), teenagers (11.7 percent), Whites (3.5 percent), Asians (2.8 percent),
and Hispanics (4.8 percent) showed little change over the month.

The number of long-term unemployed (those jobless for 27 weeks or more), at 1.3 million, was
essentially unchanged in April. The long-term unemployed accounted for 19.6 percent of all
unemployed people.

The labor force participation rate held at 62.7 percent in April, and the employment-population ratio
was little changed at 60.2 percent. These measures have shown little change over the year.

The number of people employed part time for economic reasons, at 4.5 million, changed little in April.
These individuals, who would have preferred full-time employment, were working part time because
their hours had been reduced or they were unable to find full-time jobs.

In April, the number of people not in the labor force who currently want a job, at 5.6 million, was
little changed. These individuals were not counted as unemployed because they were not actively
looking for work during the 4 weeks preceding the survey or were unavailable to take a job.

Among those not in the labor force who wanted a job, the number of people marginally attached to the
labor force, at 1.6 million, was little changed in April. These individuals wanted and were available for
work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4
weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached
who believed that no jobs were available for them, also changed little over the month at 362,000.


Establishment Survey Data


Total nonfarm payroll employment increased by 175,000 in April, lower than the average monthly
gain of 242,000 over the prior 12 months. In April, job gains occurred in health care, in social
assistance, and in transportation and warehousing.

  • Health care added 56,000 jobs in April, in line with the average monthly gain of 63,000 over the prior 12 months. In April, employment continued to increase in ambulatory health care services (+33,000), hospitals (+14,000), and nursing and residential care facilities (+9,000).
  • Employment in social assistance increased by 31,000 in April, led by a gain in individual and family services (+23,000). Social assistance had added an average of 21,000 jobs per month over the prior 12 months.
  • In April, transportation and warehousing added 22,000 jobs, with gains in couriers and messengers (+8,000) and warehousing and storage (+8,000). Over the prior 12 months, employment in transportation and warehousing had shown little net change.
  • Employment in retail trade continued to trend up in April (+20,000). Over the prior 12 months, the industry had added an average of 7,000 jobs per month. In April, employment increased in general
  • merchandise retailers (+10,000), building material and garden equipment and supplies dealers (+7,000), and health and personal care retailers (+5,000). Electronics and appliance retailers lost 3,000 jobs.
  • Construction employment changed little in April (+9,000), following an increase of 40,000 in March. Over the prior 12 months, construction had added an average of 22,000 jobs per month.
  • Employment in government changed little in April (+8,000). Over the prior 12 months, government had added an average of 55,000 jobs per month. In April, local government employment was unchanged, following an increase of 51,000 in March.
  • Employment was little changed over the month in other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; information; financial activities; professional and business services; leisure and hospitality; and other services.

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. (Monthly revisions result from additional reports received from businesses and government
agencies since the last published estimates and from the recalculation of seasonal factors.)

The Employment Situation for April is scheduled to be released on Friday, June 7, 2024, at 8:30
a.m. (ET).


ADP Report April 2024

Private businesses in the United States added 192,000 workers to their payrolls in April 2024, exceeding market expectations of a 175,000 increase and following a previous gain of 208,000.

  • Hiring was broad-based, with the service-providing sector adding 145,000 jobs, led by leisure & hospitality (+56,000), trade, transportation & utilities (+26,000), education & health services (+26,000), professional & business services (+22,000), and financial activities (+16,000).
  • The goods-producing sector added 47,000 jobs, with boosts in construction (+35,000), manufacturing (+9,000), and natural resources & mining (+3,000).
  • Annual pay for job-stayers was up 5.0% year-over-year in April, little-changed from the previous month.
  • Pay growth for job-changers eased to 9.3% from March’s 10.1%, but remained higher than it was at the beginning of the year.
United States ADP Employment Change

Source: AFP, Challenger, DOL, TradersCommunity Data, BLS

From The TradersCommunity Research Desk