U.S. Employment Situation – Apr 2018

Released Friday, May 4, 2018

downloadsNonfarm Payrolls: +164,000 month-over-month (Cons: +193,000), +2.28 million year-over-year
Unemployment Rate: 3.9% (Cons: 4.0%), -0.2 ppt month-over-month, -0.5 ppt year-over-year
Weekly Hours: 34.5 hours (Cons: 34.5 hours), unchanged month-over-month, +0.1 hours year-over-year
Hourly Earnings: $26.84, +0.1% month-over-month (Cons: +0.2%), +2.6% year-over-year

Quick Take:
Private payrolls increased by 164,000 in April, which was below economists’ estimate. March and February payroll gains figures were revised up by 30,000 collectively. Over the past 3 months, payroll gains have averaged 208,000 monthly additions, higher than the average of 186,000 since the beginning of 2010. Despite some volatility in the monthly payroll figures, the labor market continues to make steady progress and therefore moves closer to full employment.

Average hourly earnings growth was below expectations in April, growing 0.1% month-over-month. On a year-over-year basis, average hourly earnings for all employees rose 2.6% in April, unchanged from 2.6% growth in March and February. Year-over-year wage growth has gradually moved higher from its post-recession low of 1.5% in October 2012. Since that time, over 13.7 million jobs have been added to economy and the labor market has tightened considerably.

The unemployment fell to 3.9% in April, the lowest rate since December 2000 and the first decline in six months. The unemployment rate has fallen -0.5 ppt over the past year. Additionally, the U-6 rate, or a measure the of underemployed, which includes part-time workers and those only marginally attached to the labor force, declined 0.2 ppt in April to 7.8% and has now moved below the bottom of the previous business cycle seen in December 2006.

Notable Data:
April payroll gains were strongest in the professional and business services (+54,000), education and health services (+31,000), and leisure and hospitality (+18,000) industries. Payrolls declined in the wholesale trade industry (-9,800) after three consecutive months of gains.

In April, the labor force participation rate declined 0.1 ppt to 62.8% from 62.9% in March. The participation rate has ranged between 62.7% and 63.0% for 23 consecutive months. Meanwhile, the participation rate for people aged 25-54 (prime age workers) fell 0.1 ppt to 82.0% but has risen 0.4 ppt over the past six months.