US jobs report released
Newsflash: more jobs were created across the US economy than expected last month, despite higher interest rates.
The US Non-Farm Payroll rose by 253,000 in April, rather stronger than the 180,000 which economists expected.
Whoa. 253K jobs added in April. More than the 180K expected. And unemployment rate remained 3.4%. Was forecast to rise to 3.6%. Wage growth at 4.4% YOY. https://t.co/sX6qnZch01
— Paul R. La Monica (@LaMonicaBuzz) May 5, 2023
This suggests that the Federal Reserve’s series of increases in interest rates over the last year are not cooling the labor market as much as the Fed would like.
But March’s NFP has been revised down, to show that 165,000 new jobs were created, not the 236,000 first expected.
February’s NFP has also been revised lower, by 78,000, from +326,000 to +248,000.
With these revisions, employment in February and March combined is 149,000 lower than previously reported.
April’s increase is lower than the average monthly gain of 290,000 over the prior six months, point out the Bureau of Labor Statistics, adding that:
In April, employment continued to trend up in professional and business services, health care, leisure and hospitality.
Key events
Today’s jobs report shows that America’s labor market is strong, says Odeta Kushi, deputy chief economist at financial services company First American.
There’s no sign of a recession in the report, she argues, even though revisions to February and March’s data means job creation in those months was 149,000 lower than previously reported.
The labor market is strong. Total nonfarm payroll employment rose slid to 3.4%. Labor force participation was flat, while prime-age participation (25-54) ticked up to 83.3%, the highest since 2008. (2/n) pic.twitter.com/dLH55fau7i
— Odeta Kushi (@odetakushi) May 5, 2023
Important to note February and March both were revised down. The trend is still slower hiring, but the slowdown is very gradual. (3/n)
— Odeta Kushi (@odetakushi) May 5, 2023
Average hourly earnings for private-sector employees rose 4.4% from a year earlier, up from the March annual pace of 4.3%. (4/n)
— Odeta Kushi (@odetakushi) May 5, 2023
If you’re looking for signs of a recession in the labor market data, you won’t find it in this report. Soft landing is still on the table. (5/n)
— Odeta Kushi (@odetakushi) May 5, 2023
Average hourly earnings accelerated in April, bringing some relief to workers struggling with inflation, but causing a headache for the Federal Reserve.
Average hourly earnings for all employees on private nonfarm payrolls rose by 16 cents, or 0.5%, to $33.36. That’s up from 0.3% wage growth in March.
Over the past 12 months, average hourly earnings have increased by 4.4%, up from 4.3% in the year to March.
The drop in the US jobless rate since the pandemic hit the US economy is really quite impressive:
Three years ago, the unemployment rate hit a record high 14.7% as the pandemic began.
This April, the unemployment rate hit 3.4%, tying a multi-decade low. A truly remarkable pace of recovery.#JobsReport 5/ pic.twitter.com/VxOiSiFOrm
— Daniel Zhao (@DanielBZhao) May 5, 2023
The unemployment rate was also 3.4% in Jan 2023 but, before that, hadn’t been as low since 1969 and hadn’t been lower since 1953 (70 yrs).
— Aaron Sojourner (@aaronsojourner) May 5, 2023
US unemployment rate dips to 3.4%
The US jobless rate has fallen to 3.4%, from 3.5% in March.
The number of unemployed persons was ‘little changed’ in April, at 5.7 million, the Bureau of Labor Statistics reports.
This unemployment rate has ranged from 3.4% to 3.7% since March 2022, a historically pretty strong level.
Little sign yet of softness in the US #Labour market.
With a net 253k of job gains in April vs 180k est. – alongside a 3.4% unemployment rate (3.6% est) and a 4.4% wage rise (4.2%) .
Overall good economic news, but maybe not for stocks & hopes of interest rate cuts in H2’23. pic.twitter.com/5ZVgKIfq96
— PMH Capital (@CapitalPmh) May 5, 2023
US jobs report: the details
Employment continued to trend up in US professional and business services, health care, leisure and hospitality, and social assistance, the jobs report shows.
The professional and business services sector added 43,000 new jobs, more than the recent average.
Professional, scientific, and technical services added 45,000 jobs.
Employment in health care increased by 40,000 in April,
Bars and restaurants also added jobs – with employment in leisure and hospitality rising by 31,000 in April. But that’s below the average of 73,000 jobs per month over the prior 6 months, with employment around 400,000 below its pre-pandemic level.
Social assistance added 25,000 jobs, in line with the average monthly gain of 21,000 over the prior 6 months.
The financial sector shrugged off the turmoil in the banking sector too. Employment in financial activities increased by 23,000 in April, with gains in insurance carriers and related activities (+15,000) and in real estate (+9,000).
US jobs report released
Newsflash: more jobs were created across the US economy than expected last month, despite higher interest rates.
The US Non-Farm Payroll rose by 253,000 in April, rather stronger than the 180,000 which economists expected.
Whoa. 253K jobs added in April. More than the 180K expected. And unemployment rate remained 3.4%. Was forecast to rise to 3.6%. Wage growth at 4.4% YOY. https://t.co/sX6qnZch01
— Paul R. La Monica (@LaMonicaBuzz) May 5, 2023
This suggests that the Federal Reserve’s series of increases in interest rates over the last year are not cooling the labor market as much as the Fed would like.
But March’s NFP has been revised down, to show that 165,000 new jobs were created, not the 236,000 first expected.
February’s NFP has also been revised lower, by 78,000, from +326,000 to +248,000.
With these revisions, employment in February and March combined is 149,000 lower than previously reported.
April’s increase is lower than the average monthly gain of 290,000 over the prior six months, point out the Bureau of Labor Statistics, adding that:
In April, employment continued to trend up in professional and business services, health care, leisure and hospitality.
4 more minutes #nfp…buckle up…be careful out there
— jim iuorio (@jimiuorio) May 5, 2023
⚠️ 5-Minute Warning ⚠️
NFP
— PiQ (@PriapusIQ) May 5, 2023
Interestingly, every US non-farm payrolls number in the last 12 months has beaten the consensus forecast, points out Jim Reid of Deutsche Bank.
That shows that we’re currently in a labour market that few have fully understood, Reid tells clients, showing this chart to make his point:
Reid explains:
The reality is that the labour market is usually the last shoe to drop in the business cycle. Labour markets are usually relatively strong until the recession starts.
For the record, DB is assuming the run of 12 successive beats will come to an end today with a +150k forecast relative to the +185k consensus. If we’re wrong we’ll highlight the fact that the individual monthly numbers are as close to a random number generator as you can get in financial markets.
If correct we will of course put it down to skill.
But of course! We’ll find out which, in 10 minutes….
A tempestuous week for global markets will come to a crescendo today with the latest round of US employment data (in 10 minutes), predicts Rios Hadjikyriacossenior investment analyst at XM:
Another solid report is anticipated, with nonfarm payrolls expected to clock in at 180k in April, less than the 236k in March but still a healthy number overall.
The unemployment rate is seen ticking up, albeit from historically low levels, while wage growth is projected to hold steady.
Markets brace for US jobs report
Tension is mounting in the markets as investors await the latest US jobs report.
The Non-Farm Payroll, due in around 20 minutes, is expected to show a slowdown in job creation last month.
Economists predict that around 180,000 new payrolls were added in April, down from 236,000 in March (although that may be revised today). That would be the smallest monthly increase since late 2020, and a sign that the economy has lost momentum.
📊 The US BLS will release the April jobs report today, May 5 at 12:30 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of six major banks regarding the upcoming employment data. 👇#Forex #NFP
— FXStreet Team (@FXstreetUpdate) May 5, 2023
Citi
🗨️ The pace of monthly payroll growth should continue to slow back towards a more typical pre-pandemic pace, likely reflecting some combination of easing labor demand and a shrinking pool of available workers to hire.#Forex #NFP
— FXStreet Team (@FXstreetUpdate) May 5, 2023
RBC Economics
🗨️ We expect to see 150K jobs to be added to the US labour market in April, down slightly from the 236K increase in March. We look for a 0.1 percentage point increase in the unemployment rate, back to February’s 3.6% level.#Forex #NFP
— FXStreet Team (@FXstreetUpdate) May 5, 2023
Commerzbank
🗨️ We forecast a job gain of 240K, which is above the consensus expectation. The April report will thus likely lead to renewed discussions about the ‘true’ situation in the US labor market.#Forex #NFP
— FXStreet Team (@FXstreetUpdate) May 5, 2023