May 3, 2024

Payroll employment for April climbed by 175 thousand in April after jumping by 315 housand in March and 226 thousand in February.  In the past three months the average increase has been 242 thousand.  The employment gains remain sizeable.  It appears that some undocumented workers crossing the southern border with Mexico are a source of the continuing sizeable gains in employment.

In addition to hiring workers employers can also alter the length of the workweek for their existing workers.  The nonfarm workweek rose fell 0.1 hour in April to 34.3  hours after increasing 0.1 hour in March.  The workweek seems to be settling in at 34.3-34.4 hours which is about the same length that it was prior to the recession.

Job openings have fallen from a record high level of 11.7 million in early 2021 to 8.5 million, but firms continue to be unable to fill open positions.  In fact, there are currently 1.3 job openings for every unemployed worker.  The demand for labor continues to outpace supply.

The change in employment and hours worked are reflected in the aggregate hours index which fell 0.1% in April to 116.3 after rising 0.4% in March..  This index appears to be on track to increase 1.7% in the second quarter which we believe is reasonably consistent with our projected 3.0% GDP growth rate for that quarter.

Manufacturing employment rose 8 thousand.  Construction employment rose by 9 thousand.   Retail trade jobs rose by 20 thousand.  Health care jobs gained 56 thousand.   Social assistance climbed by 31 thousand.  Info tech jobs fell by 8.  Transportation and warehousing rose by 22 thousand.  Leisure and hospitality jobs climbed by 5 thousand.  Professional and business services declined 4 thousand.   Financial sector jobs rose 6 thousand.  Government jobs rose by 8 thousand almost exclusively at the state and local level.

Given these steady employment gains we expect GDP growth of 3.0% in the second quarter.

Stephen Slifer

NumberNomics

Charleston, S.C.