The nation’s nonfarm payroll employment grew by 428,000 in April, according to the U.S. Bureau of Labor Statistics — a better-than-expected increase boosted by hirings in the hospitality and manufacturing sectors.
Economists polled by Reuters expected an addition of 391,000 jobs. Hiring numbers for the prior two months were downwardly revised by a combined 39,000 jobs, but the trend for the past three months stayed generally constant at an average of 535,000 new hirings.
The U.S. economy has now recovered almost 95% of the jobs lost during the COVID-19 crisis. If April’s job-creation pace holds, the labor market could return to its pre-pandemic employment peak by July.
Manufacturing, in particular, saw a strong gain of 55,000 new jobs in April, while the continued strength of e-commerce helped to beef up transportation and warehousing employment to the tune of 52,000 jobs added. Retail added another 29,000 jobs and all three sectors exceeded their gains from the previous month. Leisure and hospitality, which added 78,000 jobs, saw hiring slow from March but still saw the largest labor increase of any sector in April.
Directly relating to the real estate market, residential building construction employment grew by 3,500 jobs in April, while nonresidential construction added another 3,900 positions. Employment in residential building has now grown by 6.9% compared to its pre-pandemic level. Nonresidential building, however, is still about 5% below where it was before the pandemic took hold.
Despite the generally encouraging report, some experts see small potential warning signs sprinkled throughout the data. The unemployment rate held steady at 3.6%, but the labor force participation rate shed 0.2 percentage points to land at 62.2%.
“Even with the job growth, prime-age labor force participation ticked down in April, as job openings hit a new record high of 11.5 million, according to the March job openings and labor turnover survey report,” said Odeta Kushi, deputy chief economist at First American Financial Corp. “Clearly, demand for labor remains strong, yet we need more workers participating in the labor force. The decline in prime-age labor force participation is not welcome news, but one month does not make a trend.”
Kushi added that weakening labor participation among women could bear watching.
“Falling female labor force participation led the decline in the prime-age labor force participation this month,” she said. “When the pandemic hit, female prime-age labor force participation rates declined further than men, prompting many to dub the pandemic recession a ‘she-cession.’
“Women’s labor force participation has made slow and steady progress since then, but the April dip was the largest month-over-month decline since September 2020. But again, one month doesn’t make a trend.”
Additionally, wage growth appears to be showing some prospective indications of peaking. Average hourly earnings were up 0.3% in April, slightly below consensus projections.
“The annual growth in average hourly earnings of production and nonsupervisory employees in construction slowed this month from 6.1% to 5.3%,” Kushi said. “The construction industry faces a shortage of skilled workers, and one way to attract and retain employees is to pay more. Construction employers face stiff competition for labor from other industries willing to pay more. Recall that the construction-quits rate surged in March to the highest rate since 2005. We need more hammers at work to build more homes, so higher quits is not good news for this labor-intensive industry.”