PeopleScout Jobs Report Analysis—April 2023

U.S. employers added 253,000 jobs in April, beating economist predictions. This shows that the labor market is remaining strong, despite rising interest rates. The unemployment rate fell slightly to 3.4%. Year-over-year wage growth rose to 4.4%.

The Numbers

253,000: U.S. employers added 253,000 jobs in April.

3.4%: The unemployment rate fell to 3.4%.

4.4%: Wages rose 4.4% over the past year.

The Good

April’s jobs numbers were stronger than economists expected and show that the labor market is not slowing down. Unlike last month, where leisure and hospitality led job growth, the most recent gains were spread across industries, with education and health services showing the strongest growth. The unemployment rate is also at historic lows. As the New York Times reports, the unemployment rates for some minority groups have also hit record lows. Black Americans have an unemployment rate of 4.7%.

The Bad

Wages growth continues to remain high. While we have seen some pockets of softening, year-over-year wage growth rose again in April, back to 4.4%. High wage growth contributes to inflation, and as CNBC reports, the Federal Reserve is looking for year-over-year wage growth to hit 3%. Wage growth hasn’t fallen than low since spring of 2021.

The Unknown

April’s jobs report doesn’t provide a clear indication of what the Federal Reserve will do at its next meeting. The Fed just raised its key short-term interest rate for the tenth time, as MarketWatch reports. Despite that, Chairman Jerome Powell suggested they could pause further rate hikes to see how inflation and the economy respond to the sharp increase in borrowing costs over the past year. Powell indicated the recent rate hikes have had an impact on families, but there is still a lot of work to do to get inflation down to 2%. The Fed meets June 13-14, so next month’s report could provide some clarity.