- ORIGINAL NEWS
Here’s what to expect from the April jobs report on Friday
- SUMMARY
**Labor Market Strength Persists** The U.S. labor market continues to surprise economists with its resilience.
Despite expectations of a slowdown, nonfarm payrolls are projected to gain approximately 240,000 in April, indicating robust hiring.
The unemployment rate is anticipated to remain at 3.8%, showcasing a tight labor market.
**Resilient Job Growth** Despite exceeding initial estimates, the April hiring figure marks a slight decline compared to the 276,000 average monthly job gains seen so far this year.
However, this growth remains strong and could signal the Fed’s reluctance to lower interest rates as inflation remains above its target of 2%.
**Sectoral Distribution of Growth** Health care and leisure and hospitality have been major drivers of employment growth this year, with expectations of expansion in education, manufacturing, and warehousing as seasonal trends take hold.
**Wage Growth Monitored** The report will also reveal wage growth figures.
While estimates suggest a 0.3% monthly increase in average hourly earnings, economists caution that immigration patterns and California’s minimum wage increase could potentially distort these numbers.
**Fed’s Response** The Fed is closely monitoring the labor market to assess any potential impact on inflation.
A slight decrease in payroll growth, coupled with declining wage pressures and an increase in labor force participation, would present an ideal scenario for the Fed.
**Market Uncertainty** Market sentiment has fluctuated due to uncertainties about the Fed’s rate path.
Investors are weighing the Fed’s prioritization of unemployment or inflation in its monetary policy decisions.
The April jobs report is expected to provide insights into the Fed’s future course of action.
- NEWS SENTIMENT CHECK
- Overall sentiment:
neutral
Positive
“The labor market has been full of surprises this year, topping Wall Street estimates at a time when many economists expected hiring to have slowed down.”
“Markets also will be closely watching the wage numbers.”
Negative
“If that top-line number is accurate, it actually would reflect a small step back from the average 276,000 jobs a month created so far in 2024.”
“That has pushed the Fed into a box as officials are reluctant to start cutting interest rates until they get more convincing evidence that inflation is under control.”