Key takeaways

  • The Bureau of Labor Statistics (BLS) reported that the U.S. economy added 175,000 jobs in April 2024, the slowest jobs gain in six months and below market expectations. The unemployment rate ticked up from 3.8% to 3.9%.
  • Average hourly earnings eased as well, with the metric falling below 4% year over year (YoY) growth for the first time since June 2021.
  • While April’s job data was softer than expected, timely initial claims for unemployment insurance data do not suggest a material weakening in the labor market at this junction.
  • Our strategists believe that the April jobs data should help Fed officials to regain some confidence that inflation can get back to its 2% target over time; it is just going to require some patience.


John Veit

Moderating job growth

The April jobs report indicates the labor market is softening – but other employment indicators suggest there is no imminent weakening in the labor market. 175,000 jobs were added in April, the slowest gain in six months.1 The report is welcome news for the Fed as it alleviates some inflationary pressures.

March’s nonfarm payroll gains were revised up to 315,000 and February’s nonfarm payroll gains were downwardly revised to 236,000. April’s nonfarm payroll gains bring the three-month average employment gain to 242,000 from 269,000 in March, indicating job growth is moderating but still strong.2

This chart shows the monthly nonfarm payroll employment change in thousands from May 2023 to April 2024.

Industry breakdown

Payroll gains in April were more broadly distributed than the past two months. Private payrolls rose by 167,000, driving most of the gains. Jobs in goods-producing industries rose 14,000 while service-sector jobs rose by a much stronger 153,000, reflecting resilient demand for services industries. Jobs in leisure and hospitality rose by a milder 5,000.3

Employment in construction and government industries also rose, but more modestly in April. Government jobs rose by a softer-than-expected 8,000 jobs in April, the smallest monthly gain since December 2022.4

Unemployment rates and growth

The overall unemployment rate rose to 3.9% in April from 3.8% the prior month. Although the rate ticked slightly higher, it still marks the 27th consecutive month the jobless rate remained below 4%, indicating that the labor market remains too tight.5 The rise in the unemployment rate was driven by an increase in the unemployment rate of older workers. The rate for prime-age workers was unchanged and the rate for younger workers fell.

Meanwhile, timely initial claims for unemployment insurance also do not suggest an imminent material weakening in the labor market at this junction:

  • There were 208,000 jobless claims during the week ending on April 27, the same number as the prior week.
  • There were 1,774,000 continuing jobless claims, also the same number as the prior week, during the week ending on April 20.6

However, other data points suggest the labor market is slowly easing:

  • The preliminary reading of the April average hourly earnings report, an important measure for inflation, increased by a softer-than-prior 0.2% month-over-month.7 This pushes the year-over-year (YoY) rise to 3.9%, marking the first annual reading below 4% since June 2021.8
  • There was a decline in the average weekly hours worked in April, another sign that labor demand is moderating, which should help move inflation closer to the Fed’s 2% goal.
  • March’s job openings fell to 8.49 million from 8.81 million the prior month, according to the BLS Job Openings and Labor Turnover Summary. This lowered the job openings rate to 5.1%,9 the lowest rate since January 2021.

These points highlight that the labor market isn’t as strong as it was earlier this year and is trending in the right direction from the Fed’s perspective.

This chart shows the unemployment rate and average hourly earnings percentage change from January 2018 to April 2024.

Rate implications

Overall, the April jobs report paints a picture of a labor market that is slowing but not weakening imminently. While the Fed welcomes signs of a more balanced labor market, they are being patient and have indicated they are in no hurry to lower interest rates until they see sustained, compelling evidence of slower inflation. Slower wage growth will contribute to lower inflation, but the Fed will also look to some of the stickier components, such as shelter cost, for indications of decline.

At the April Federal Open Market Committee (FOMC) meeting, the Fed held its benchmark overnight interest rate steady at 5.25% to 5.5% for a sixth straight meeting.10 Fed Chair Jerome Powell reiterated the Fed will continue to make decisions on a meeting-to-meeting basis and remain fully data-dependent.

The Consumer Price Index (CPI) slightly rose to 3.5% YoY in March, an uptick from the 3.2% rise in February, but down from over 9% in 2022.11 Despite the slight uptick, the overall downtrend in inflation suggests the economy could avoid a hard economic landing while successfully bringing inflation down to the Fed’s goal.

The April inflation report is set to be released May 15 and will play a significant role in the Fed’s interest rate decision-making process at its next FOMC meeting. However, it’s important to note that the Fed’s preferred measure of inflation, the Personal Consumption Expenditures (PCE) deflator, will be released May 31 and will likely play a larger role in their decision-making.



Bureau of Labor Statistics. “The Employment Situation—April 2024.”










U.S. Department of Labor, “Unemployment Insurance Weekly Claims – May 2, 2024.”


Bureau of Labor Statistics. “The Employment Situation—April 2024.”




Bureau of Labor Statistics, “March Job Openings and Labor Turnover Summary.” (April, 2024)


Federal Reserve. “Federal Reserve issues FOMC statement.”


Bureau of Labor Statistics. “Consumer Price Index – March 2024.”

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