May 5, 2023

The US economy added +253,000 jobs in April, beating expectations of a +180,000 gain.

However, previous months were revised downwards by -78k in February and -71k in March, for a total of -149k.

As a result, average job gains over the past three months were +222k per month, down from an average rate of +399k per month in 2022.

Professional and business services added +43k jobs in April and health care added +40k. Leisure and hospitality added +31k jobs in April, but remains -402k jobs (-2.4%) below its pre-pandemic levels.

Other contributors to the net job gains included social assistance (+25k), financial activities (+23k), government employment (+23k), and mining and resource extraction (+6k). Employment in other major industries, including retail, transportation, construction, and manufacturing, were largely unchanged.

The US unemployment rate remained unchanged from March to April at 3.4%, its lowest level since May 1969.

The labor participation rate remained unchanged from March at 62.6%, though this remains below pre-Covid levels.

Much of the post-Covid decline in labor participation has come from a persistent fall-off among those age 55 and older.

In contrast, the employment-to-population ratio among those of prime working age (25-54) has steadily risen to 80.8%, higher than both its pre-Covid and pre-2008 peaks.

Average hourly wages rose +0.5% m/m in April, up +4.4% from a year ago. However, this remains below the rate of consumer inflation (CPI = +5.0% y/y in March) so real wages have still declined.

In 1Q2023, real hourly wages were down -1.0% from a year ago.