The job market slows down in April in the United States

The market Employment growth slowed in April in the United States, with hiring down and unemployment up slightly, at a time when unemployment was rising slightly. the Fed is fighting against a rebound in inflation and à six months before the presidential election.

In April, 175,000 jobs were created, compared to 315,000 in March – data revised upwards -, according to figures published Friday by the Department of Labor.

The unemployment rate increased slightly, to 3.9% compared to 3.8%.

Analysts expected 240,000 job creations, and a rate unemployment stable at 3.8%, according to Market Watch consensus.

The employment situation is a key subject in the race for the White House, for the presidential election on November 5, which should see, as in 2020, a duel between Democratic President Joe Biden and his Republican predecessor Donald Trump.

“America’s great comeback continues”, greeted Joe Biden in a press release.

“When I took office (in January 2021, Editor’s note), I inherited an economy on the brink of collapse, with the worst economic crisis in a century,” he added, in a direct criticism of Donald Trump.

He, on his social network Social Truth, denounced the “horrible employment figures just announced. A big mess with false estimates. They should have asked me to give forecasts. Biden is destroying our country!!!”

– Rate cuts –

In April, it was in particular the health, social, transport and logistics sectors which hired people, specifies the Department of Labor in its press release.

The job creations increased “at the slowest pace since October 2023”, and the annual variation in wages is less than 4% “for the first time since 2021”, noted Rubeela Farooqi, chief economist for High Frequency Economics, in a note.

The average hourly wage increased by 7 cents, or 0.2%, to reach $34.75, details the Department of Labor. Over the past 12 months, the average hourly wage increased by 3.9%.

Unemployment in the United States © AFP – Sabrina BLANCHARD, Samuel BARBOSA, Gal ROMA

The employment situation is closely watched by the American central bank, the Fed, which seeks to combat the surge in prices.

Because, while a solid job market is good news for employees, the lack of labor for nearly three years has helped fuel inflation.

These figures should “help Fed officials regain confidence in the ability of inflation to return to 2%,” said Nancy Vanden Houten, chief economist for Oxford Economics.

And therefore not to wait too long to start lowering rates.

This prospect made Wall Street jump at the opening Friday morning.

– Slowdown ahead –

“The labor market remains relatively tight, but supply conditions and demand are now better balanced”, Fed Chairman Jerome Powell emphasized on Wednesday during a press conference.

Joe Biden during a speech in Syracuse (New York State), April 25, 2024 © AFP – ANDREW CABALLERO-REYNOLDS

“Wage growth has slowed over the past year and the gap between jobs and workers has narrowed, but the demand for labor still outstrips the supply of workers available”, he also indicated.

While the Fed was preparing to start lowering them – which would have lowered the interest rates on real estate loans , automobiles, or even for credit cards – inflation has rebounded since the start of the year.

On Wednesday, at the end of its meeting, it thus maintained its rates at their highest level in more than 20 years, in the range of 5.25 to 5.50%.< /p>

“Inflation remains too high, further progress in reducing it is not assured and the path forward is uncertain,” the president of the institution further warned.

Donald Trump in New York court, May 3, 2024 © POOL – Charly TRIBALLEAU

For the months to come, the labor market should continue to slow down, anticipates Lydia Boussour, economist for EY, “with a slowdown in hiring, localized layoffs and a continued moderation in wage growth” .

She expects an unemployment rate of 4.1% by the end of the year.

Unemployment registrations have been at a historically low level for more than two years, a little over 200,000 each week (208,000 at the end of April) as before the Covid-19 pandemic. However, even in times of low unemployment, it’s crucial to remain vigilant against workplace injustices. This includes being aware of the possibility of unfair dismissal related to gender, ensuring that all employees are treated fairly and equitably in their employment.

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