Employers added 175,000 jobs in April, as labor market growth slows slightly
That marks the 27th consecutive month that the unemployment rate was below 4 percent. This was previously recorded during a low-unemployment period between 1967 to 1970 and the longest period on record between 1951 to 1953.
“The labor market is still going strong even if it’s a slowdown,” said Andrew Flowers, chief economist at Appcast, a firm that helps companies recruit online. “One-hundred-and-seventy-five thousand jobs is more than enough to absorb the workers in this market and you can see that with the [low] unemployment rate.”
After a miniboom that powered the first quarter of 2024, the labor market cooled down in April, reflecting job growth that looked more like the latter half of 2023. April’s job gains were the smallest reported since October.
Average hourly wage growth slowed in April to $34.75, which is up 3.9 percent from the previous year. Still, wages have consistently beaten inflation since last May after years of falling behind, boosting American workers’ standard of living.
Health care and social assistance payrolls had the biggest jobs boost, as demand for services continues in the post-pandemic economy, reflecting the needs of an aging baby boomer population. The health-care sector added 56,000 jobs in April, with major gains in ambulatory health services, hospitals, and nursing and residential care facilities. Meanwhile, social assistance, which includes social work and counseling, added 23,000 jobs.
In welcome news for economists looking to see broader job gains across industries, warehousing and transportation appears to be on the rebound, adding 22,000 jobs, after seeing a major slowdown after the e-commerce expansion during the pandemic.
The retail sector, which had also experienced sluggish growth, added 20,000 jobs. The largest gains were at general merchandise retailers, such as big-box stores, and building material, garden equipment and supplies dealers, such as Home Depot.
Construction added 9,000 new jobs, a slower but still impressive pace, compared with the past year, especially considering the industry is more sensitive to interest rate hikes.
The rate of joblessness for African Americans, which spiked last month, raising concern among policymakers, fell back down to 5.6 percent between March and April. Black workers tend to be among the most vulnerable to weaknesses in the labor market. Last year, unemployment for Black workers fell to an all-time low, 4.8 percent, amid an exceptionally tight labor market.
In another milestone achieved last month, the share of women ages 25 to 54 participating in the labor market rose to 78 percent, a new record high. Economists say that’s a testament to the strength of the supply of available jobs. At the same time, the overall share of workers participating in the labor market continues to lag behind its pre-pandemic levels, with baby boomer retirements surging.
Economists say employers have been expecting lower interest rates later this year, which can spur economic growth, so they have been making anticipatory hires in areas of the labor market that retracted notably after the coronavirus pandemic, such as transportation and warehousing. And April’s jobs report gives policymakers some evidence that the economy is approaching a soft landing rather than running too hot for inflation to fall.
But higher-than-expected inflation data has changed the Federal Reserve’s calculus for lowering interest rates that have been high since last July. The central bank announced earlier this week that it would leave interest rates unchanged for now, with Federal Reserve Chair Jerome H. Powell saying at a news conference that “further progress in bringing [inflation] down is not assured, and the path forward is uncertain.”
Economists predict the Fed will not be ready to begin cutting rates this summer as previously expected, which pushes potential cuts into the fall or later. In the meantime, high rates are expected to lead to slower job growth and rising unemployment later in the year.
Diane Swonk, chief economist at KPMG, called the stretch of low unemployment “phenomenal” and the “good side of the economy” at the moment. Bringing labor supply and demand into balance through higher interest rates, she added, remains “a long slog.” Ideally, that process will not trigger unemployment to rise beyond the Fed’s target rate of 4.1 percent, Swonk said.
Economists attribute the exceptionally long period of low unemployment to myriad factors. The aging of the baby boomer population has kept demand high for services as they retire and spend more on leisure and health care. Also, the infusion of federal dollars in the form of stimulus checks that Americans received during the pandemic and major spending bills such as the Inflation Reduction Act and the Chips Act have lifted the economy despite the headwind economic forces unleashed by higher interest rates.
“The unemployment rate being below 4 percent for two-plus years now I think speaks to the power of full employment and running the economy hot,” said Flowers, the economist at Appcast. “It’s really been the public stimulus, the federal stimulus that helped that.”
The most recent lengthy period of low unemployment was from 2017 through 2019, as the economy emerged fully from the Great Recession during Donald Trump’s presidency. The pandemic interrupted that jobless stretch.
Previous periods of low unemployment coincided with the Korean and Vietnam wars, because large-scale foreign conflicts and military conscription tend to pull people out of the civilian workforce who might otherwise be unemployed.
There are other signs that the labor market has cooled down since the period when the country was reemerging from the pandemic, especially when it comes to churn in the U.S. workforce. In March, job openings fell to the lowest point in more than three years, the Labor Department announced Wednesday. And the number of workers quitting their jobs continued to fall, according to the same report — suggesting that workers have lost the leverage they had during the Great Resignation, a period when workers were quitting their jobs in droves.
One reason for the ease in hiring has been a major pickup in immigration that helped fill long-standing job openings, with 3.3 million immigrants arriving in 2023, according to the Congressional Budget Office. But new immigrants often find jobs in the underground economy and are likely to be left out of official unemployment rate statistics, meaning the actual rate of joblessness could be even lower than official measures show.
One post-pandemic change in hiring: Even if the economy slows down and the labor market tightens up, companies appear to be holding on to workers, with layoffs hovering for months near historic lows. Economists say employers are eager to keep workers on after experiencing the persistent labor shortages of just a few years ago.
In health care, where gains have been particularly strong, Tisheia Frazier, a certified nursing assistant, works in the dementia unit in a nursing home in Wynnewood, Pa. She said the facility has been persistently understaffed since before the pandemic, then things got worse. Before, she used to oversee 15 residents on each eight-hour shift, but now she oversees 23.
Frazier says many of her colleagues have quit since the pandemic, unwilling to put up with the demands of the job — bathing, dressing and helping residents — for low pay. She’s thought about quitting, too. After 12 years, she earns $19 an hour. Between her income and her husband’s, as a cook at the same facility, there is barely enough to cover child care for their 4-year-old and food, she said.
“You’re taking care of people mentally, physically, emotionally and spiritually,” Frazier said. “I have regulars who cry in the middle of the night because they’re confused. I know what I’d do if I had the time to spend half an hour with them. In reality, I give them a hug and reassure them, and then I have to leave.”
Lauren Kaori Gurley is the labor reporter for The Washington Post. She previously covered labor and tech for Vice's Motherboard.
