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This was a generally solid jobs report, with the economy adding 253,000 jobs in April. However, there were sharp downward revisions to both the February and March jobs numbers, of 78,000 and 71,000, respectively. Taken together, the April figure is just 104,000 higher than the number previously reported for March.
The household survey also showed a very positive picture, with the overall unemployment rate edging down to 3.4 percent, a half-century low. The unemployment rate for Black workers fell to 4.7 percent, a new record low. The unemployment rate for Black men over age 20 also hit a record low of 4.5 percent. The previous low, before this recovery, for overall Black unemployment was 5.3 percent and for Black men it was 5.1 percent. The unemployment rate for Black teens fell to 12.9 percent, tying the record low hit in September.
Falling Hours Partially Offset Rising Employment
The average workweek was unchanged from March, but it is down from January and February. As a result, the index of aggregate hours has actually fallen at an annual rate of 0.7 percent since January. The January data were likely anomalous, but the index of aggregate hours has risen at less than a 0.9 percent annual rate since October; this is certainly a sustainable pace in the growth of labor demand.
Wage Growth Accelerates in April
There was a big jump in the average hourly earnings in April, which brought the annualized rate of growth over the last three months to 4.2 percent. This is still considerably slower than the 6.4 percent rate seen at the start of 2022, but likely somewhat faster than is consistent with the Fed’s 2.0 percent. This is somewhat faster growth than had been reported in March, but the prior months’ data has been revised upward.
It is worth noting that the wage growth being reported in the Average Hourly Earning (AHE) series is somewhat slower than the 4.8 percent rate reported in the Employment Cost Index. This gap could be the result of error in the data, but, if it is real, it would imply that the change in composition is reducing average wage growth. (The gap is still there if we do an apples to apples comparison looking at ECI for private sector wages.) That would mean we are seeing less employment in higher paying industries and occupations, and more employment in lower paying ones.
If that is the case and this shift is persisting, as opposed to being a peculiar development associated with reopening from the pandemic, as was the case in 2021, we would likely be more interested in the AHE data. This would indicate the increase in average hourly wages in the economy as a whole. Insofar as workers are moving into lower paying positions, these are presumably also lower productivity positions. If we are trying to determine the impact of wage growth on inflation, we want to see how wages increase relative to productivity. Since the latter is affected by changes in composition, we want a wage measure that is also affected by changes in composition.
Share of Unemployment Due to Voluntary Quits Fall Again
The share of unemployment due to voluntary quits falls to 13.8 percent, well below 2019 peaks and only slightly higher than 13.6 percent average for the year. By this measure, the labor market is still strong, but very much within the normal range. It had peaked at 15.8 percent in September.
Share of Short-Term Unemployed Falls Sharply
After rising in February and March, the share of the unemployed who have been out of work less than five weeks fell sharply in April, from 38.9 percent to 33.2 percent. While having more long-term unemployed would ordinarily be bad news, if we are seeing a recession coming on, there has to be an increase in short-term unemployment before there can be an increase in long-term unemployment. We are not seeing any evidence of this to date.
Wage Growth Continues to be Fastest for Lower Paid Workers
Throughout the recovery, lower paid workers have higher than average wage growth. That trend is continuing. The average hourly wage for production and non-supervisory workers overall, as well as in the low-paying leisure and hospitality sector, increased at a 4.7 percent annual rate over the last three months.
Employment to Population Ratio for Prime Age Workers Rise to Post Pandemic Highs
The overall prime age (25 to 54) employment to population ratio rose by 0.1 pp in April to 80.8 percent, 0.2 pp above pre-pandemic peak. For women, there was a 0.2 pp increase in April to 75.1 percent. This is 0.4 pp above its pre-pandemic peak. The rate for men fell by 0.1 pp to 86.4 percent, 0.4 pp below its pre-pandemic peak.
Professional and Technical Services and Health Care Lead Job Growth
The professional and technical services category added 45,000 jobs in April, while health care added 39,600 jobs. Job growth in restaurants slowed, with the sector adding just 24,800 jobs in the month. Hotels added just 200 jobs. Restaurant employment is still 0.7 percent below its pre-pandemic level. Hotel employment is down by 11.9 percent.
Manufacturing and Construction Add Jobs, After Small Losses in March
Construction (including residential construction) and manufacturing both added jobs in April, after small losses in March. Construction added 15,000 jobs, with residential construction adding 14,200. Manufacturing added 11,000. This is noteworthy, since these sectors are historically the most cyclical. The jobs numbers show no evidence of a recession, although the index of aggregate hours in both sectors is down from January.
Nursing Homes and Child Care Both Add Jobs
As low-paying sectors with difficult work, employment in both nursing homes and child care has lagged in the recovery. Nursing homes added 2,600 jobs in April, while child care facilities added 2,400. Employment in the two sectors is now down by 11.9 and 5.1 percent, respectively.
Labor Market Remains Solid, but Sustainable
The overall picture in the April employment report is incredibly positive. Unemployment is at a half-century low and Black unemployment is the lowest on record. We are still adding jobs, but the demand for labor as measured by the growth rate in hours worked is very much at a sustainable pace.
Wage growth may still be somewhat more rapid than is consistent with the Fed’s 2.0 percent target, but it is only modestly higher than what we saw in 2019, when inflation was at roughly 2.0 percent. If the Fed’s rate hikes don’t due too much damage going forward, and we don’t see serious fallout from the banking crisis, the labor market looks great.
The Center for Economic and Policy Research (CEPR) was established in 1999 to promote democratic debate on the most important economic and social issues that affect people's lives. In order for citizens to effectively exercise their voices in a democracy, they should be informed about the problems and choices that they face. CEPR is committed to presenting issues in an accurate and understandable manner, so that the public is better prepared to choose among the various policy options.
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'Fossil Fuels Are Killing Us': Scientists Publish Sweeping Review of Industry Harms
The new paper in the peer-reviewed journal Oxford Open Climate Change highlights the diverse impacts of "every stage of the fossil fuel life cycle" and stresses that the "industry has obscured and concealed this evidence through a decadeslong, multibillion-dollar disinformation campaign aimed at blocking action to phase out" its deadly products.
"The fossil fuel industry has spent decades misleading us about the harms of their products and working to prevent meaningful climate action," said co-author Naomi Oreskes, professor of the history of science at Harvard University, in a statement. "Perversely, our governments continue to give out hundreds of billions of dollars in subsidies to this damaging industry. It is past time that stops."
"The most polluted communities should be prioritized for clean energy investments and removal and cleanup of dirty fossil fuel infrastructure."
While the researchers focused on the United States, "as the world's largest oil and gas producer and dominant contributor to these fossil fuel crises," their review—including proposed "science-and-justice-based solutions" for an economywide effort to "forge a path forward to sustaining life on Earth"—applies to the whole world, which is quickly heating up due to emissions from coal, gas, and oil.
The article features sections on the fossil fuel-driven climate crisis, public health harms, environmental injustice, biodiversity loss and extinction, petrochemical pollution, and industry disinformation. Each section lays out the "problem" and "solutions."
The climate emergency section includes details such as "the production and combustion of oil, gas, and coal are responsible for nearly 90% of human-caused carbon dioxide (CO2) emissions and approximately 79% of total greenhouse gas emissions," and "failures in political will to implement necessary climate action have made the 1.5°C benchmark nearly impossible to achieve without overshoot," referring to a primary goal of the 2015 Paris agreement.
Although the current U.S. administration has demonstrated its alliance to the fossil fuel industry—including with President Donald Trump's recent energy emergency declaration—the scientists still emphasized what's possible in the country.
"In the USA, powerful policy levers are available to governments and civil society at the local, state, national, and international levels to phase out fossil fuels and transition to a clean, renewable energy economy," they wrote. "These levers include regulation (e.g. applying and enforcing existing laws), legislation (e.g. polluters pay laws, fossil fuel subsidy reform, land use laws limiting drilling), and litigation (e.g. holding fossil fuel companies accountable, defending existing law)."
They also warned that "last-ditch efforts to prolong the fossil fuel industry are proliferating. These include counterproductive false solutions, like carbon capture and storage (CCS), which would perpetuate fossil fuel use while capturing only some of the resulting emissions, and hydrogen made from fossil fuels."
The public health section notes that "air pollution from fossil fuel combustion accounts for 8.7 million (equaling 1 in 5) premature deaths per year worldwide and 350,000 premature deaths per year in the USA. In a single year, air pollution from oil and gas production in the USA resulted in 410,000 asthma exacerbations, 2,200 new cases of childhood asthma, and 7,500 premature deaths in 2016."
Co-author David J.X. González, an assistant professor of environmental health sciences at the University of California, Berkeley, said Monday that "we've got to work fast to end fossil fuel operations near our homes, schools and hospitals and trade fossil fuel infrastructure for healthy, clean energy."
"Oil, gas, and coal will continue to condemn us to more deaths, wildlife extinctions, and extreme weather disasters unless we make dirty fossil fuels a thing of the past."
The paper points out that "climate change is increasing incidence of physical and mental health impacts and mortality through multiple pathways: worsening extreme events including heatwaves, severe storms, floods, droughts, and wildfires; shifting ranges of disease vectors; threats to food security; and displacement and forced migration, which restrict access to healthcare and other basic services."
"These harms, though broadly felt, also disproportionately impact marginalized communities which are already disproportionately burdened by other socioenvironmental hazards, as well as susceptible populations including young children, people with certain disabilities, people experiencing homelessness, pregnant people, people with chronic diseases, and older adults," the publication continues.
University of Montana associate professor of environmental studies Robin Saha, another co-author, said that "decades of discriminatory policies, such as redlining, have concentrated fossil fuel development in Black, Brown, Indigenous, and poor white communities, resulting in devastating consequences."
"For far too long, these fenceline communities have been treated as sacrifice zones by greedy, callous industries," Saha added. "The most polluted communities should be prioritized for clean energy investments and removal and cleanup of dirty fossil fuel infrastructure."
The paper's other co-authors are Robert Bullard of Texas Southern University, Boston University's Jonathan J. Buonocore and Mary D. Willis, Trisia Farrelly of the Cawthron Institute, William Ripple of Oregon State University, and the Center for Biological Diversity's Nathan Donley, John Fleming, and Shaye Wolf.
"The science can't be any clearer that fossil fuels are killing us," declared Wolf, the paper's lead author and the center's climate science director. "Oil, gas, and coal will continue to condemn us to more deaths, wildlife extinctions, and extreme weather disasters unless we make dirty fossil fuels a thing of the past. Clean, renewable energy is here, it's affordable, and it will save millions of lives and trillions of dollars once we make it the centerpiece of our economy."
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