By Lindsay Hogan, Senior Economist
April nonfarm payrolls rebounded from a weak March, growing by a seasonally adjusted 211,000, heartily beating economists’ consensus estimates of 185,000. Prior months’ revisions added 13,000 jobs in February to total 232,000 for the month, and subtracted 19,000 from March which totaled 79,000. Weak job gains in March were attributed to transitory factors such as unseasonable weather and disruption from the Easter and Passover holidays.
The unemployment rate fell for the third consecutive month to 4.4% in April, the lowest level since 2006. However, the most recent decline was due to a reduction in the labor force participation rate. Even so, job growth remains stable and the unemployment rate is below what many economists agree to be full employment, suggesting that the economy is nearing full employment, if it hasn’t already reached that mark.
Private payrolls grew 194,000, led by gains in leisure and hospitality (+55,000), education and health services (+41,000) and professional and business services (+39,000). Public payrolls rose by 17,000 as local government gains more than offset reductions in federal payrolls while state employment remained largely unchanged. Despite a flurry of store closures in April and several large retailers announcing large layoffs, retail payrolls expanded by a modest 6,300 positions after shedding 56,000 positions collectively in February and March. Construction employment benefited from unseasonably warm weather at the start of the year, but snowstorms in the Northeast put the brakes on hiring in March. Job growth improved modestly in April, gaining 5,000 positions, but was still conspicuously weaker than in January and February, suggesting that some payback for early hiring may now be taking place.
The solid April jobs report should allay fears of an economic slowdown following an anemic first quarter which saw initial GDP growth of just 0.7%. Slow first-quarter growth has characterized this expansion and several transitory factors, including unseasonable weather and delayed tax refunds, contributed to this year’s lackluster start. The GDP report did not rattle the Fed, instead the group will focus on the April and May jobs reports when it meets in June. Most Fed leaders expect at least two more rate hikes over the remainder of the year, and the April jobs report improves the likelihood that the next rate hike could come at the June meeting.
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Eric Becker | 104 West Partners | firstname.lastname@example.org
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