Markets reacted with glee to the April jobs report out this morning as employment trends blew away expectations.
Total employment increased by 115,000, according to the Bureau of Labor Statistics, almost double the market’s expectations for a gain of 62,000 jobs.
The unemployment rate was unchanged at 4.3 percent.
‘Investors worried that layoff announcements from tech giants like Microsoft and Meta could mean even more widespread layoffs ahead, their fears have not been borne out by the data this time around,’ Jay Woods, chief market strategist at Freedom Capital Markets, told the Daily Mail.
This is the second consecutive month of better-than-expected job growth: The March report saw a revised gain of 185,000 jobs, which like April was well above the consensus view.
Wood told us the stable unemployment rate makes it even more likely for the Federal Reserve to hang tight and wait for more data before changing interest rates.
Stock markets gained ground before the open of trading thanks to the strong jobs report.
Revisions to the jobs numbers out earlier this year were mixed: The February total was revised down by 23,000 jobs to -156,000, while March was revised higher by 7,000 jobs to +185,000.
Markets surged higher this morning as the April jobs report blew away Wall Street’s expectations
The April jobs data showed that gains were, once again, driven by the health care, which added nearly 54,000 roles.
Transportation also showed strength, adding more than 30,000 jobs, especially among couriers and messengers.
The outstanding jobs numbers come just a week after a separate report showed solid US economic growth in the first quarter – despite the Iran conflict and rising oil prices.
Gross domestic product (GDP), which measures all the goods and services produced in the economy, grew at a 2 percent annualized rate in the year to March, up sharply from the fourth quarter rate of 0.5 percent.
US economic growth in the first quarter was bolstered by strong consumer spending, a huge gain in business investment from AI and higher government spending after Congress finally resolved the longest government shutdown on record last year.Â
While the numbers out today are outstanding, a separate jobs report published by Challenger, Gray & Christmas showed that layoffs in April rose 38 percent to 83,387, driven by technology companies cutting staff as they pivot to investment in artificial intelligence.
According to Challenger, Gray & Christmas, AI was cited for 26 percent of all job cuts in April, with Meta, Amazon and Coinbase announcing big staff reductions.
Over 119,000 tech employees have been laid off this year, with April being the third-highest month for job losses since 2009.
US job and economic growth remains solid despite the uncertainty surrounding the Iran war
April’s strong job growth and steady unemployment rate could prompt the Fed to turn its attention back to resurgent inflation as the conflict in the Middle East pushes prices higher.
Deeper trends behind the data suggest that as the US population ages and immigration plummets, the amount of job growth needed to keep the unemployment rate under control is also sliding, a point outgoing Fed chair Jerome Powell made earlier this year.Â
In March, Powell said that while there had been ‘zero net job creation in the private sector,’ that may have been ‘about what the economy needs in terms of dealing with very, very low -nonexistent, really -growth in the labor force, which, of course, we’ve never had in our history.’
