Updated May 3, 2024 - Economy

The job market is transitioning to a more steady state

Illustration of bar chart columns forming a briefcase.

Illustration: Shoshana Gordon/Axios

The labor market isn't the turbocharged hiring machine of the last couple of years. Instead, hiring looks to be moderate, steady and solid.

Why it matters: Friday's employment report should ease fears that the job market is reaccelerating — while offering reassurance that it's still healthy, with few signs the economy is in trouble.

Driving the news: Employers added 175,000 jobs in April, down from an upwardly revised 315,000 payrolls in March.

  • Meanwhile, the unemployment rate ticked up slightly to 3.9% from 3.8% — a move that looks even smaller if you go out an extra decimal place, as it rose from 3.83% in March to 3.86% in April.
  • It's the 27th consecutive month that the jobless rate has been below 4% — matching the longest stretch since the 1960s.

The big picture: There's a lot to like in the report — both for workers who are still in high demand and Federal Reserve officials looking for proof that inflation pressures are subsiding.

By the numbers: The details point to both ample jobs and diminishing wage pressures.

  • The share of employed prime-age workers, those between 25 and 54, rose a tick to 80.8% — hovering near the highest in more than 20 years. (For women, it hit an all-time high).
  • Average hourly earnings rose just 0.2% in April, down a tick from the prior month. Over the past three months, they rose at a 2.8% annualized rate — sharply lower than 4% in March.

State of play: Yields on the two-year Treasury note — most sensitive to policy moves by the Fed — dropped by 0.09 percentage points after the report, as it is consistent with the Fed delivering interest rate cuts at some point this year.

What to watch: "This is the jobs report the Fed would have scripted," Seema Shah, chief global strategist at Principal Asset Management, wrote in a note.

  • "[Friday's] weaker numbers need to mark the start of a new slower trend for multiple rate cuts to seriously be back on the agenda — but, by then, the new fear could be a slowing economy," Shah added.
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