U.S. employment growth in April may slow due to the fading impact of temporary factors such as warmer weather and the return of striking healthcare workers. According to Odaily, this does not indicate a substantial change in labor market conditions, with the unemployment rate expected to remain stable at 4.3%. Data is also anticipated to show accelerated wage growth last month, reinforcing financial market expectations that the Federal Reserve will maintain interest rates unchanged until 2027.
A Reuters survey attributes part of the employment data fluctuations to adjustments in the 'birth-death model,' which estimates job changes due to business openings or closures. Some economists note that significant business turnover makes it challenging for the Bureau of Labor Statistics to estimate job creation related to new enterprises. Additionally, factors such as weather, strikes, government layoffs, and U.S. President Donald Trump's administration's crackdown on illegal immigration have contributed to labor force volatility.
Economists recommend using a three-month moving average of employment data for a better understanding of labor market conditions. Citigroup economist Veronica Clark suggests that averaging recent months' data still indicates moderate positive employment growth. Despite the significant changes in immigration flows leading to a sharp decline in average employment growth this year, this alone is not a cause for concern.
Miyuki
