The labor market continues to impress with the 40th straight month of job growth and an unemployment rate that ticked lower. Job gains in Q1 2024 averaged 276,000 per month, compared to the Q4 2023 average of 212,000 jobs added each month. The jobless rate fell as more people entered the workforce. Gains were broad-based. Wages, an important inflation metric, increased slightly, up 0.3% to 4.1% year-over-year (YOY). It was the lowest annual gain since June 2021.
The Numbers*:
The U.S. economy added 303,000 jobs, significantly more than the 214,000 jobs expected by economists. The labor market’s highest gains occurred in health care, government, leisure and hospitality and construction, but also touched other sectors. Retail also contributed to the gains, adding 18,000 jobs.
The unemployment rate fell to 3.8% and the number of unemployed people also fell slightly to 6.4M.
The labor force participation rate went up from 62.5% to 62.7% after remaining flat for the previous 3 months.
The number of open jobs reduced slightly from 8.9M to 8.8M.
According to Forbes, Salary Springboarding—leaving jobs purely for more money or leveraging salaries for negotiation during the recruitment process—is leveling off. Overwhelmingly, SMBs and almost 20% of white-collar employees have been affected by the practice post-pandemic. Still, as inflation comes down and companies’ hiring needs balance, the market will become less candidate driven.
Since the job market remains very strong, it’s unlikely that Federal Reserve will reduce interest rates quickly but will wait until we’re closer to their 2% inflation target. The black unemployment rate is consistently twice that of white workers. There have been shifts and changes in the labor market, but since data started gathering in 1972, it has routinely returned to a level of two to one.
