Start a 14-day no obligation free trial to our premium research platform to see more of our market analysis.
Today’s nonfarm payrolls print missed, with businesses reporting the creation of 160,000 jobs for the month of April. That was versus expectations of 200,000 and 215,000 last month. The pace of jobs gains lately hasn’t been fantastic, but given the variation we see from one month to the next in the headline jobs print, the 160,000 reading is by no means terrible.
Wage growth came in at a solid +0.3% MoM pace for all private employees. That takes both the all private and production/supervisory only worker wage prints to 2.5% YoY. While that’s pretty modest in nominal terms, keep in mind inflation is well below 2%, so in real terms incomes are growing respectably. Hours worked was also stable, so as payrolls continue to grow and wages also rise, total worker income is up 4.7% YoY, right in the middle of the post-recession range. That’s nothing to complain about!
In the table below, we break down average hourly earnings by industry. As shown, most of the weakness in wages this month was from trade/transportation/utilities as Retail and Wholesale trade pay decelerated MoM. The Utilities sector looks terrible, but this very small segment has extremely volatile pay stats that should be taken with a grain of salt. Manufacturing wages were strong, Construction was mixed, and technology (Information) was positive. Leisure and Hospitality saw a second month in a row of 5% annualized wage gains.
Finally, one dynamic that had been significant in the last few months was the rapid uptick in the labor force participation rate. After 4.484 million workers entered the labor force by moving from “Not In Labor Force” to “Employed” last month, only 4.055 million did this month. The result was lower labor force participation as 4.526 million workers moved from the ranks of the employed to out of the labor force entirely; that’s a proxy for retirements, and is much less sensitive to general labor conditions.