Our forecast for the U.S. employment report for April expects an increase of 60,000 jobs with the unemployment rate remaining at 4.3%.
We expect an increase in average hourly earnings of 0.3% on the month and 3.8% from one year ago.
Hiring in April will be similar to what has been the case for some time: Health care and education will be the primary driver of overall private sector hiring, leisure and hospitality will ease, and job creation elsewhere will be relatively restrained as government hiring remains weak and even declines.
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One should expect hiring to remain constrained as businesses, hit by higher energy costs, take a more cautious approach on their payrolls.
Aside from the price shock, the underlying causes of the restrained pace of hiring continue: bad demographics, tight immigration policies, the end of labor hoarding by large firms and the nascent impact of artificial intelligence that is bolstering corporate productivity.
All of these factors will continue to result in a hiring level that is statistically insignificant from zero.
Those underlying dynamics will also keep the economy away from 1970s-style stagflation by preventing a substantial increase in unemployment amid rising inflation and slower growth.
Given that the breakeven necessary to keep labor conditions stable lies between zero and 50,000 jobs per month, initial estimates of hiring figure to be restrained going forward.
Should our forecast be below the actual estimate, that implies a three-month average of 35,000 jobs, which falls within that range.
