Nonfarm payrolls are expected to rise by 185,000 in April. Private payrolls should account for 170,000 of those gains. The federal government is still catching up on positions frozen during the shutdown. Rising numbers of government retirees will need to be replaced.
Health care is expected to continue to lead job gains, along with leisure and hospitality. The latter picked up in March with hiring ahead of the spring break travel season, which was delayed by the late Easter. Hiring in professional services has been moderating along with temp jobs. The sweet spot remains computer programming and information technology.
Construction gains are expected to moderate, while manufacturing employment remains weak. A large buildup of inventories in the first quarter needs to be liquidated. Boeing idled a portion of its 737 Max production while it searches for a fix to the plane’s electrical system.
Retail employment remains a laggard. It has actually contracted in recent months as a surge in store closings takes hold. Traditional retailers and malls continue to lose ground to online competition.
Average hourly earnings are expected to rise 0.2%, which would put year-over-year gains at 3.2%, the same as in March. We seem to have hit a plateau in the acceleration of wages after a spurt at the start of the year. Inflation has abated with the exception of prices at the gas pump, which is not the kind of inflation warming that the Federal Reserve is targeting. The Fed is looking for signs of broader-based gains in pricing power and wages as the labor market tightens, not the cooling in core inflation that we have seen outside of the energy sector. We will be watching prices at the gas pump closely as they tend to crimp purchasing power, especially for low-wage workers who have finally seen their wages pick up in recent years.
The pickup in retail wages is among the largest: Year-over-year gains averaged close to 5% during the first three months of this year despite the ongoing push to clicks from bricks. Retail behemoths Amazon, Walmart, and most recently Costco, boosted pay for entry-level workers, which has made it even more difficult for smaller firms to compete. The other bright spot is wages in information technology, which jumped more than 6% from a year ago during the first three months of the year.
Separately, the household survey is expected to show that the unemployment rate edged back down to 3.7%, a low for this expansion. We expect to see the participation rate ticked up a bit in April following a dip in March. Millennial women have been drivers of gains. Recent moves to provide a second chance for former convicts should also help the numbers in the months to come.
Foreign-born workers have played a key role in boosting labor force participation, which underscores the need for immigration reform. Curbs to H-1B visas have picked up despite the administration’s pledge to open the doors to more skilled immigrants. This summer many of the spouses of those workers will lose their ability to work. This is becoming a recruiting challenge, especially for firms seeking high-tech workers.
Diane SwonkHealth care is expected to continue to lead job gains, along with leisure and hospitality. The latter picked up in March with hiring ahead of the spring break travel season, which was delayed by the late Easter. Hiring in professional services has been moderating along with temp jobs. The sweet spot remains computer programming and information technology.
Construction gains are expected to moderate, while manufacturing employment remains weak. A large buildup of inventories in the first quarter needs to be liquidated. Boeing idled a portion of its 737 Max production while it searches for a fix to the plane’s electrical system.
Retail employment remains a laggard. It has actually contracted in recent months as a surge in store closings takes hold. Traditional retailers and malls continue to lose ground to online competition.
Average hourly earnings are expected to rise 0.2%, which would put year-over-year gains at 3.2%, the same as in March. We seem to have hit a plateau in the acceleration of wages after a spurt at the start of the year. Inflation has abated with the exception of prices at the gas pump, which is not the kind of inflation warming that the Federal Reserve is targeting. The Fed is looking for signs of broader-based gains in pricing power and wages as the labor market tightens, not the cooling in core inflation that we have seen outside of the energy sector. We will be watching prices at the gas pump closely as they tend to crimp purchasing power, especially for low-wage workers who have finally seen their wages pick up in recent years.
The pickup in retail wages is among the largest: Year-over-year gains averaged close to 5% during the first three months of this year despite the ongoing push to clicks from bricks. Retail behemoths Amazon, Walmart, and most recently Costco, boosted pay for entry-level workers, which has made it even more difficult for smaller firms to compete. The other bright spot is wages in information technology, which jumped more than 6% from a year ago during the first three months of the year.
Separately, the household survey is expected to show that the unemployment rate edged back down to 3.7%, a low for this expansion. We expect to see the participation rate ticked up a bit in April following a dip in March. Millennial women have been drivers of gains. Recent moves to provide a second chance for former convicts should also help the numbers in the months to come.
Foreign-born workers have played a key role in boosting labor force participation, which underscores the need for immigration reform. Curbs to H-1B visas have picked up despite the administration’s pledge to open the doors to more skilled immigrants. This summer many of the spouses of those workers will lose their ability to work. This is becoming a recruiting challenge, especially for firms seeking high-tech workers.
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