The April 2024 U.S. Jobs Report –  is Stable Good?

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The U.S. labor market added 175,000 jobs in April, the White House said today via its Council of Economic Advisors. More than  60% of private-sector industries added jobs. The unemployment rate ticked up slightly to 3.9% – it went from 3.83% to 3.86% – and the labor force participation rate held steady at 62.7%. AutoInformed sees nothing in the report that is practically worrisome to the auto industry.* What will be telling is if the companies can adjust supply  and pricing to demand without incurring losses. Wage gains continue to outpace inflation. See Figure 2 chart after page the break.  (Read AutoInformed on: April 2024 US Vehicle Sales Drop Slightly)

“At the same time, as economic expansions progress, we expect GDP and job growth to slow to a steadier and more stable pace than the breakneck growth pace coming out of the trough of the pandemic-induced recession,” CEA said. “Economists have referred to this as normalization or sometimes, as economic cooling.”

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“We learned at least two things this morning about the U.S. labor market. First, most importantly, we learned that employers continue to hire at a strong pace, helping to generate record spells of both low unemployment and high women’s LFPRs. Second, we learned that as the pandemic continues to fade into the rear-view mirror, some key economic misalignments are realigning in a manner consistent with steady, stable, sustainable growth,” CEA said.

Wage gains continue to outpace inflation. Click to enlarge.

Adarsh Jain, CFA, Director of Financial Markets at GlobalData put it thus: “2024 started strong with labor market witnessing an unprecedented three consecutive months (Jan-March) of 15%+ month-on-month growth in job postings, signaling robust jobs demand. It is natural to anticipate a pullback from this rapid pace as companies adjust their demand, given that job postings, indicating hiring intentions, experience their first double-digit decline in four months in April, with a 12% month-on-month decrease.”

“In terms of sector trends, consumer driven sectors like retail, automotive and consumer have been strong, despite persistent inflation, whereas tech sectors like telecom and IT have exhibited weakness. It will not be surprising if advances in AI continue to have a dampening [damping in auto speak- editor] effect on the demand for labor in these sectors,” Jain said.

* “New light-vehicle inventory started April at just under 2.58 million units and increased 3.5% to 2.67 million units by the end of the month. We expect that inventory will but will decline slightly in May, as May is typically a high-volume sales month. For 2024 as a  whole, we believe that new light-vehicle sales will total 15.9 million units,” said Patrick Manzi, National Automobile Dealers Association Chief Economist.