What To Expect From Tomorrow's Report on Jobs

Updates, May 2, 2024: This article has been updated to include the results of the Job Openings and Labor Turnover Survey.

The job market has been steaming ahead lately, and forecasters don’t see any sign that it slowed down much in April.

Friday’s official report on jobs from the Bureau of Labor Statistics is likely to show employers tacked on another 240,000 jobs in April, according to a survey of economists by Dow Jones Newswires and the Wall Street Journal. That would be a slowdown from the 303,000 added in March, but still solid by historical standards. (For comparison, the economy added an average of 177,000 jobs each month in the three years leading up to the pandemic.) 

Hot Job Market Not Necessarily Good News

A still-hot job market would be good news for workers, but uncomfortable for financial markets. While this data is released after this week's Fed meeting, it would be one more bit of data pushing policymakers at the Federal Reserve to keep interest rates higher for longer, maintaining upward pressure on borrowing costs for all kinds of loans. 

Fed officials have kept interest rates high to combat inflation but with the risk of causing unemployment to rise. If the job market stays resilient, there will be less urgency to cut interest rates to prevent job losses. 

Market Participants Also Watching Data on Wages

Markets will also be closely watching how much worker pay increased in April since Fed officials have worried that rapid wage increases could fuel inflation.

The median forecast calls for a 0.3% rise in average hourly wages. High wage increases and hot inflation could stoke concerns that the Fed will increase interest rates at some point to corral inflation that’s proved more stubborn than expected this year. 

“If inflation doesn’t reestablish a downward trend soon, the prospect of rate increases will come to the fore,” Sal Guatieri, senior economist at BMO Capital Markets, wrote in a commentary.

In addition to April’s jobs numbers, the bureau gave more detail on March’s data when it released the Job Openings and Labor Turnover Survey (JOLTS). There were 8.5 million job openings in March, down from 8.8 million in the last month, and the fewest since February 2021, the Bureau of Labor Statistics said Wednesday. It was lower than forecasters anticipated, but well over the historical average.