The U.S. economy likely brought back the most jobs since August last month, with payrolls jumping by 1 million and the unemployment rate improving to a new pandemic-era low as more businesses reopen.
The Labor Department is set to release the April jobs report Friday morning at 8:30 a.m. ET. Here are the expected main results, according to consensus data compiled by Bloomberg:
Non-farm payrolls, April: +1.000 million expected vs. +916,000 in March
Unemployment rate, April: 5.8% expected, 6.0% in March
Average hourly earnings, month-over-month, April: 0.0% expected, -0.1% in March
Average hourly earnings, year-over-year, April: -0.4% expected, 4.2% in March
Non-farm payrolls are expected to rise for a fourth straight month and at an accelerating clip, with easing social distancing standards across the country helping support the recovery. Every economist polled by Bloomberg predicted a strong increase in payrolls: On the high end, Jefferies economist Aneta Markowska estimated a surge of 2.1 million payrolls for April, while Prestige Economics’ Jason Schenker penciled in payroll gains of 700,000 on the low end.
But on average, economists are expecting a blowout payrolls number of at least 1 million. Nomura chief economist Lewis Alexander said market participants should brace for a “monster U.S. payroll number” this week, driven in large part by advances in some of the industries hardest-hit by the pandemic. Leisure and hospitality payrolls are still down by 3.3 million compared to February 2020 levels, but have been making some of the largest gains over the past several months to try and lessen this deficit.
“Re-opening activity spurred increased spending on leisure and hospitality over March and early April, likely translating into a strong increase for food services and accommodation employment,” Alexander wrote in a note Thursday. “Moreover, a broad range of labor market indicators — jobless claims, business and consumer surveys — suggest solid improvement in conditions.”
And recently, companies and business surveys have suggested that the main economic concern now is around making sure businesses have enough workers to keep up with rising demand.
“We know per recent qualitative data that companies are starved for employees at the moment. We can see that in both ISM reports (manufacturing and services) as well as in the Fed’s Beige Book,” economists at RBC Capital Markets wrote in a note last week. “Moreover, we know that continuing claims (not-seasonally adjusted) made a sizable improvement when measured between the payroll survey weeks, and that underpins our forecast.”
Still, many Americans remain on the sidelines of the labor market, and will likely continue to do so until concerns around the pandemic recede further. But with more than 40% of the population already injected with at least one dose of a COVID-19 vaccine, additional progress is unlikely to come quite as quickly,