The job market cooled slightly in April but remained solid, a long-expected slowdown economists say gives little reason for concern.
Employers added 175,000 jobs last month, down from the 242,000 per month they averaged in the past year, according to data released this morning by the U.S. Bureau of Labor Statistics. While that’s a softening, it still represents the 40th consecutive month of job growth. The unemployment rate ticked up, but remained just under 4 percent.
The new numbers paint a picture of an economy moving to a gentler, and likely more sustainable, pace of growth after the massive spikes of the pandemic recovery. The report underscored the fact that this economy has been particularly strong for blue collar workers and Black workers, although employers are gaining leverage.
“We’re just getting to a more boring normal, a more beige economy,” said Andrew Flowers, chief economist at Appcast, a recruitment marketing platform.
The report is likely a relief for officials at the Federal Reserve, for whom a red-hot job market had stoked fears of further inflation.
Average hourly earnings have increased by 3.9 percent in the past 12 months, a fair showing, but a significant slowing from past reports. That should assuage concerns that the labor market is contributing to inflation, said Cory Stahle, an economist at the job posting company Indeed.
Nearly half of the jobs added last month were in healthcare and social services. Meanwhile sectors that had previously contributed to fast-paced growth, such as leisure and hospitality, construction, and government, were little changed.
Generally over the past year, economists have noted a strengthening in sectors that require face-to-face or physical interaction. Legislative action, like the Inflation Reduction Act, has spurred demand in manufacturing and construction. Traditionally white collar occupations however, like those in tech, have seen reduced employer demand and even layoffs.
“If you’re a job seeker, it’s never been a better time to be an occupational therapist, to be an HVAC technician, to be a plumber,” Flowers said. “It’s quite a reversal from the last few decades when everyone was telling young folks to learn to code.”
Lisa Gerickont is one of the thousands of people who took on a new job in the healthcare sector this year. In March, she retired from her role as a tax collector for a small New Jersey town to work part-time as a home health aide for a friend. She took more than 70 hours of classes and passed a state licensure exam in order to get paid through an agency for her work.
But despite the hurdles, Gerickont has met many people in her personal life who have been eager to make a similar switch in order to care for aging family members.
“There are a lot of people trying to do it,” she said.
The tight employment market of recent years has particularly benefited female workers and people of color, who have seen their gaps with white men shrink. The labor force participation rate of women aged 25-54 was the highest ever recorded in April, at 78 percent. The Black unemployment rate fell to 5.6 percent, easing concerns after recent increases. Over the past few years, the gaps between the Black and white unemployment rates have been some of the smallest recorded.
Jared Bernstein, chair of the White House Council of Economic Advisers, referenced the shrinking gaps in a speech to the Economic Club of New York on Tuesday.
“The absence of full employment has, for the past 40 years, been a structural shortfall,” Bernstein said. “Labor markets do not settle into full employment and the absence of these conditions is starkly counter to our worker centered agenda.”
The mild slackening in the labor market this month is likely to make life harder for job seekers, but easier for employers. The share of workers quitting their jobs went down slightly in March, according to BLS data released earlier this week, as workers lose confidence that they can find another role.
For employers all this will mean an easier time finding and retaining employees, with less competition for workers.
Kate Riivald has seen the effect of labor shortages in blue collar industries in her personal life. She has had to delay car repairs because the shop she goes to is short-staffed.
But in her role as a senior director of sales at the global jam brand St. Dalfour, it’s been a different story. The company’s U.S. team of about 20 has hired three employees over the past year, easily making contact with applicants through LinkedIn, word of mouth, and recruiting firms.
“I don’t think it’s super challenging in this industry and at this level that I’m hiring at,” Riivald said.
Ordinarily, economists would consider a sharp slowdown in hiring to be a concerning sign. But Stahle, from Indeed, said in this case it’s important to remember that our context has been changed by so many months of fast-paced growth.
He compares the feeling to the one you get dropping from 80 miles per hour to 65 on a freeway.
It may feel sluggish at first, but in the end, you’re still moving pretty fast.