Current:Home > MarketsUS jobs report for April will likely point to a slower but still-strong pace of hiring -FutureWise Finance
US jobs report for April will likely point to a slower but still-strong pace of hiring
View
Date:2025-04-16 19:50:11
WASHINGTON (AP) — The American economy likely delivered another solid hiring gain in April, showing continuing durability in the face of the highest interest rates in two decades.
The Labor Department is expected to report Friday that employers added a healthy 233,000 jobs last month, down from a sizzling 303,000 in March but still a decidedly healthy total, according to a survey of forecasters by the data firm FactSet.
The unemployment rate is forecast to stay at 3.8%. That would make it the 27th straight month with a jobless rate below 4% — the longest such streak since the 1960s.
The state of the economy is weighing on voters’ minds as the November presidential campaign intensifies. Despite the strength of the job market, Americans remain generally exasperated by high prices, and many of them assign blame to President Joe Biden.
Yet America’s job market has repeatedly proved more robust than almost anyone had predicted. When the Federal Reserve began aggressively raising rates two years ago to fight a punishing inflation surge, most economists expected the resulting jump in borrowing costs to cause a recession and drive unemployment to painfully high levels.
The Fed raised its benchmark rate 11 times from March 2022 to July 2023, taking it to the highest level since 2001. Inflation did steadily cool as it was supposed to — from a year-over-year peak of 9.1% in June 2022 to 3.5% in March.
Yet the resilient strength of the job market and the overall economy, fueled by steady consumer spending, has kept inflation persistently above the Fed’s 2% target. As a result, the Fed is delaying any consideration of interest rate cuts until it gains more confidence that inflation is steadily slowing toward its target.
So far this year, monthly job growth is averaging 276,000, up from an already solid 251,000 last year.
“If you look at the last couple of months, it has been a safe bet to take the optimistic side,’’ said Aaron Terrazas, chief economist at the employment website Glassdoor.
That said, the job market has been showing some signs of eventually slowing. This week, for example, the government reported that job openings fell in March to 8.5 million, the fewest in more than three years. Yet that is still a vast number of vacancies: Before 2021, monthly job openings had never topped 8 million, a threshold they have now exceeded every month since March 2021.
The number of Americans quitting their jobs — a figure that generally reflects confidence in finding a better position elsewhere — fell in March to its lowest level since January 2021.
A more stable workforce, Terrazas said, is helping many businesses run more efficiently.
“When firms have high numbers of workers quitting,” he said, “that takes up time to find and train new workers. It’s incredibly destructive at the company level.”
Now, “there are finally people in seat who know what they’re doing, know the processes, know the systems. You don’t need to waste a lot of resources on training.’'
Economists have noted that hiring has recently been concentrated in three employment sectors: healthcare and social assistance; leisure and hospitality (largely hotels, restaurants and bars); and government. Those three categories accounted for nearly 70% of job growth in March.
More concerningly, the progress against inflation has stalled, raising doubts about the likely timetable for Fed rate cuts, which would, over time, reduce the cost of mortgages, auto loans and other consumer and business borrowing. Most economists envision no rate cuts before fall at the earliest.
On a month-over-month basis, consumer inflation hasn’t declined since October. The 3.5% year-over-year inflation rate for March was still running well above the Fed’s 2% target.
The central bank’s inflation fighters will be watching Friday’s jobs report for any signs that the inflation picture might be shifting. From the Fed’s perspective, Terrazas said, “the best outcome we can hope for Friday is slower but still solid payroll growth, steady employment and, most importantly, slowing wage pressure.”
Many economists say that year-over-year increases in hourly pay must slow to about 3.5% to be consistent with the Fed’s inflation goals. That probably didn’t happen last month: The forecasters surveyed by FactSet project that hourly wages rose 4% from a year earlier, just below the 4.1% year-over-year rise in March.
veryGood! (92)
Related
- New data highlights 'achievement gap' for students in the US
- See Selena Gomez's Sister Gracie Shave Brooklyn Beckham's Head
- Arik Gilbert, tight end awaiting eligibility ruling at Nebraska, is arrested in suspected burglary
- Michigan man won $835k this year after winning online lottery twice
- Scoot flight from Singapore to Wuhan turns back after 'technical issue' detected
- Yes, people often forget to cancel their monthly subscriptions — and the costs add up
- How to win USA TODAY Sports' NFL Survivor Pool: Beware of upsets
- See Khloe Kardashian's Adorable Photos of Daughter True Thompson on First Day of Kindergarten
- Former Danish minister for Greenland discusses Trump's push to acquire island
- 'It's what we do': Florida manatee caught in pound net rescued, freed by Virginia Marine Police
Ranking
- Israel lets Palestinians go back to northern Gaza for first time in over a year as cease
- Rapper 50 Cent cancels Phoenix concert due to extreme heat that has plagued the region
- Amazon Reviewers Swear By This Genius Cleaning Ball to Keep Their Bags Dirt & Crumb-Free
- Arik Gilbert, tight end awaiting eligibility ruling at Nebraska, is arrested in suspected burglary
- Paris Hilton, Nicole Richie return for an 'Encore,' reminisce about 'The Simple Life'
- Hollywood union health insurance is particularly good. And it's jeopardized by strike
- TikTok has a new viral drama: Why we can't look away from the DIY craft controversy
- Hurricane Idalia tracker: See the latest landfall map
Recommendation
The Super Bowl could end in a 'three
Idalia projected to hit Florida as Category 4 hurricane with ‘catastrophic’ storm surge
Shooting at White Sox game happened after woman hid gun in belly, per report
CBS to honor 'The Price is Right' host Bob Barker with primetime special: How to watch
Will the 'Yellowstone' finale be the last episode? What we know about Season 6, spinoffs
Bachelor Nation's Jade Roper Pens Message to Late Baby Beau After Miscarriage
UNC-Chapel Hill grad student Tailei Qi charged with murder in shooting death of professor Zijie Yan
Fire weather conditions expected in parts of Northern California. PG&E says power cuts are possible