US Job Growth Plunges: Biggest Miss Since 2021

US Job Growth Plunges: Biggest Miss Since 2021 

Prior to today's release of the payrolls report, our earlier analysis anticipated a slowdown, questioning its magnitude. We also speculated whether Yellen had disclosed a weaker figure to Japan before their interventions this week, aiming to avoid unnecessary capital loss.

The Bureau of Labor Statistics (BLS) just unveiled that the US added only 175,000 jobs in April, marking a nearly 50% decrease from the revised 315,000 in March, the lowest figure since October 2023. This fell significantly short of the estimated 240,000 jobs.

Notably, this deviation from expectations is the largest since December 2021. Prior data underwent downward revisions, with February's total nonfarm payroll employment revised down by 34,000 and March's revised up by 12,000, resulting in a combined decrease of 22,000 from previous reports.

The government sector notably contributed just 8,000 jobs in April, the least since December 2021, hinting at a deliberate attempt to steer the final outcome.

The addition of 363,000 jobs from the birth death model mitigated the downturn to some extent. However, both the Establishment survey and the Household survey displayed weakness, with only 25,000 jobs added according to the latter, a significant decline from March.

This exacerbates the existing gap between the number of employed individuals and job holders, widening by another 150,000. The unemployment rate rose more than anticipated, reaching 3.9%, the highest since January 2022.

While the unemployment rate for Blacks decreased, other demographic groups experienced little change. Despite the uptick in unemployment, the participation rate remained steady at 62.7%.

Average hourly earnings saw a modest increase of 0.2% month-over-month, falling short of the expected 0.3% rise. On an annual basis, earnings rose by 3.9%, lower than last month's 4.1% and the estimated 4.0%.

Examining the job gains in April, the BLS identified increases in healthcare, social assistance, and transportation and warehousing, offset by a notable slowdown in government hiring. Industries such as retail trade and construction saw minimal changes in employment levels, while government employment remained largely unchanged.