The days of monthly job increases in the millions are gone, and the US labor market recovery has entered a new phase with new challenges: It’s not because employers are unwilling to hire; rather, as of March, there were approximately two open positions for every unemployed worker.
This limits the number of jobs that can be added each month.
According to economists polled by a foreign publication, the economy added just under 400,000 jobs in April, according to the carefully anticipated monthly jobs data.
That would be the weakest increase in employment since April of last year.
Even though the economy would be just 1.2 million jobs short of the total number of employment lost during the epidemic, the number seems underwhelming when compared to the best growth of the recovery.
“Some would say [job growth] is normalizing as the economy approaches full employment,” ADP chief economist Nela Richardson told reporters on Wednesday, adding that she expects the road back to normalcy will be rocky.
The ADP Employment Report, which tracks private payrolls, came in below estimates on Wednesday, with only 247,000 jobs added in April.
The government’s official unemployment rate is forecast to fall to 3.5 percent, matching the historic low set before the Covid outbreak. Prior to 2019, the last time unemployment was this low was in 1969.
The bottom line: On the whole, Friday’s report should seem very decent, especially in comparison to pre-pandemic days. However, it is apparent that the rate of recovery has accelerated.
Hiring harmed by inflation
Meanwhile, the United States’ inflation crisis is impacting the hiring market.
Businesses must raise wages to compete for talent as consumer prices climb on everything from food to rent and gas.
Smaller businesses are particularly heavily hit, as they are unable to hire as many people as they might otherwise.
According to figures released earlier this week by the Bureau of Labor Statistics, the country had a record number of job openings in March — 11.5 million.
In March, the number of workers who voluntarily left their employment reached a new high of 4.5 million, yet hiring still surpassed quitting.
Despite the fact that these figures are a month older than Friday’s job numbers, they show that the hiring appetite remained robust in April.
In terms of the summer months, any reduction in inflation could be beneficial.
According to Richardson, the manufacturing business, for example, could experience additional job growth, while leisure and hospitality also ramps up seasonal hiring.
The April jobs data will be issued at 8:30 a.m. ET on Friday.
