The Line: Employment Rose by 115,000 Last Month

Today, we have the April jobs report courtesy of my old employer, the BLS.

Employment Rose by 115,000 Last Month

Another month, another blow away jobs number. Here are the details:

• 115,000 jobs were added in April, more than double what was expected.
• Job growth for March was revised upwards to 185,000. That means the US has added 300,000 jobs in just the past two months. Not too shabby.
• The unemployment rate was unchanged from the previous month, at 4.3%.
• The largest gains in employment last month were in health care (+37,000), transportation and warehousing (+30,000) and retail trade (+22,000).
• Federal government employment fell 9,000 in April and is down by 348,000 since peaking in October 2024.
• Wages rose by 0.2% last month and are 3.6% higher than a year ago, both of which were slightly below estimates. The concern here is whether wages can keep pace with inflation, which could be challenging given the spike in prices since March.

After ping ponging since last May, the US has had back-to-back strong months of job growth. In other good labor market news, initial claims for unemployment recently fell to their lowest level since 1969, and the number of job openings remains very high at 6.9 million. The WSJ also reported this week that corporate layoffs are down 10% so far this year despite AI eliminating more than 85,000 jobs.

This is all great news for the economy, but not great news for those who want rate cuts. The Fed does have a dual mandate of price stability and maximum employment, and right now it’s clear inflation is a much bigger problem than hiring.

We will get the April CPI report next week, which is expected to show a 3.5%-3.7% annual increase in prices. That’s much higher than the Fed’s 2% target and would mean that prices are now growing just as fast as wages. Consumers had a hard enough time buying things when wages were rising faster than prices, now it will become even more difficult, and since personal consumption is roughly 70% of GDP, that could lead to very weak economic growth in the coming months.

Happy Mother’s Day

I’d like to close today’s Line by wishing a happy Mother’s Day to all the moms out there, especially my mother and wife. My mother is an amazingly strong woman who raised four boys while my dad worked multiple jobs. I can honestly say I wouldn’t be where I am today if my mom hadn’t pushed me hard to succeed, and it’s that same drive that I try to instill in my son each day. My wife has done a great job making sure I don’t push Gregory too hard, and has taught him to be a respectful, compassionate, and all-around great kid.

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