The April jobs report shows that the economic recovery from the recession still has wings and has put a kibosh on worries of a coming recession.
Data from the Bureau of Labor and Statistics released on Friday indicated that 263,000 jobs were added to nonfarm U.S. payrolls in April. The data aligned with what would be expected in a growing economy – good news for President Donald Trump, who regularly points at the performance of the U.S economy as a sign of his administration’s success.
“The three-month moving average – jobs growth is at about 160,000 or so, which is consistent with an economy that is growing at a 2% pace,” said Michelle Meyer, chief U.S. economist at Bank of America Merrill Lynch.
Jobs were added in several categories, with solid gains in professional service, education and construction. The balance of sectors where jobs are being added is a promising sign as well.
“With that balance comes a generally healthy perspective of the labor market,” said Russell Price chief economist at Ameriprise Financial in Troy, Mich.
But a glaring weak spot was in retail trade, which lost jobs for the fourth consecutive month. 32,000 retail jobs have disappeared thus far in 2019.
Although the pace of job creation can vary across sectors and regions, the current growth trend corresponds with what Amy Fair, recruiting specialist at Express Employment Professionals in Spokane, Wash., has seen. Her firm provides general and skilled labor workers to over 100 businesses in the Spokane area. The company has been able to send a stream of applicants to employers, who seem pleased. Construction and skilled trade clients make up the majority of the clientele.
“When we send applicants to our clients, it is with the hope that they will get hired on, and that is what happens quite frequently,” Fair said.
Employment in retail trade has dragged down jobs number this year. The loss of retail jobs continued in April with 12,000 fewer positions compared to March. The decline is likely more of a reflection of the move toward ecommerce than sluggishness at the cash register, since March retail sales saw its biggest increase in more than a year according to the Census Bureau’s latest data.
“It’s been fashionable to think brick and mortar stores are going out of business, and this year it does indeed finally seem to be happening,” said Chris Rupkey, chief financial economist at MUFG.
Megan Holaday of Tyler, Texas, was a 2019 victim of the retail sector’s job shedding. In January, she was let go from her job at Barnes & Noble. The layoff came as a shock, but it also led her to transition to a different type of job, a change she had planned to eventually do down the road.
“I think at that point, it was better to go ahead and make that change now rather than delay it any further,” Holaday said.
“I had the option to reapply with the company and go to a different area, but I wanted to stay where I was and see if I could find something in my area rather than relocating.”
She felt that her strong job history and solid references would compensate for a lack of a college degree and lead to a favorable outcome. But the job search was an up-and-down experience bringing excitement some days and low points on others. Holaday applied for over 100 jobs.
In late April, Holaday was hired and began a new position at KeHe Distributors in Tyler as a planogram specialist designing and arranging displays for grocery stores.
She is excited about her new role and relieved to no longer be on a job hunt.
“I could see it taking a lot longer. If I hadn’t gotten this job, I probably would have just settled for a part-time position because I was starting to feel like ‘I don’t know how much longer I can do this,’” Holaday said.
Positive jobs numbers – along with last week’s strong GDP report and steady gains in the stock market – could provide a boon to President Donald Trump, who will pin the strength of the U.S. economy to his 2020 reelection efforts. If economic growth continues, the Trump administration may be able to ride that wave of optimism to four more years in the White House.
While the state of the economy seems to have limited effects on midterm elections, presidential elections hinge more on it, according to Julia Pollak, labor economist at ZipRecruiter.
“Both sides will try to use the economic data to bolster their arguments, but I think the jobs gains will certainly help Trump,” she said.
But the current rate of growth may fail even to satisfy Trump. He and his administration have regularly criticized the Federal Reserve for refusing to cut interest rates that would encourage further spending and investment. The Fed decided to not adjust the benchmark interest rate this week, keeping it between 2.25% to 2.5%.
Friday’s jobs numbers appear to support the measured pace that the Fed is taking. Wage growth also increased 3.2% in 2019, according to the report.
“I think this report has been Goldilocks for the Fed,” said Meyer.
“The labor market is expanding, so that suggests that there’s not that much concern with a downturn in the economy. But yet wage growth is increasing slowly, so you don’t have to hike to get in front of wage growth.”
While experts caution about finding meaningful trends in a single report, April’s numbers combined with other data, such as unemployment claims, ought to encourage Americans about continued job growth in the near term.
“Unemployment claims are remarkably low. They are like the canary in the coal mine for the job market. They remain very low, so that’s giving us confidence.” Price said.