April Jobs Report Commentary from MBA's Joel Kan

The following is MBA VP and Deputy Chief Economist Joel Kan’s reaction to this morning’s U.S. Bureau of Labor Statistics report on employment conditions in April.  

--

“April’s jobs report showed a little less strength than expected. The economy added 175,000 jobs over the month, with a net upward revision for the prior two months, but this was lower than the 242,000 average for the 12 months leading up to this. Of note, average hourly earnings grew 3.9% from a year ago, a third consecutive deceleration in wage growth and the slowest since May 2021. This slowdown in wage growth indicates there has been some cooling in hiring and will help ease some of the upward pressure on service sector inflation, which has been one of the drivers keeping overall inflation elevated. This is consistent with data published earlier this week showing fewer job openings and lower quit rates. The unemployment rate ticked up slightly to 3.9 percent, close to the highest level since early 2022 but still low by historical standards.  

“The Fed indicated earlier this week that they are in no hurry to cut rates given the persistence of higher inflation. However, today’s report might give them some leeway to do so if the job market continues to weaken and if inflation trends start to follow.  As indicated in our FOMC commentary earlier this week, we expect mortgage rates to decline later this year, but not as quickly as we initially expected.”