Despite Modest April Jobs Report, Upward Employment Trend Forecast To Continue
April’s jobs report from the U.S. Bureau of Labor Statistics slowed from the rapid growth registered in March, with nonfarm employment growing 266,000 in April compared to 770,000 new jobs in March. However, indicators still point to strong growth as the year continues, and the Conference Board’s Employment Trends Index (ETI) significantly increased in April. The index’s reached 105.44 in April, up from 102.65 in March, up 45.7 percent from the year-ago level.
The Conference Board’s ETI aggregates eight labor market indicators, each of which has proven accurate in its own area. Aggregating individual indicators into a composite index filters out “noise” to show underlying trends more clearly. April’s increase was driven by positive contributions from six of the eight components.
“Despite the disappointing April jobs report, the Employment Trends Index significantly increased in April, suggesting strong employment growth in the coming months,” says Gad Levanon, head of The Conference Board Labor Markets Institute. “Most of the Index’s components are rapidly improving. However, the number of employees in the temporary help industry, usually a strong leading indicator of employment, declined in April. Rather than signaling a weak outlook for job growth, it may reflect some substitution in employment as employers hire more regular employees and end contracts with temporary workers.”
Levanon adds, “The recovery in the leisure and hospitality sector remains strong, but, very surprisingly, employment in the rest of the economy, in aggregate, declined in April. Some of this decline reflected a reversal of pandemic trends. As more people frequent restaurants, fewer workers are needed in food stores. As more people shop in person, fewer workers are needed for home deliveries. Moreover, as employers are more confident about the economic outlook, they hire more regular employees and fewer workers from the temporary help industry.”
“With pandemic-related restrictions being gradually curtailed, and the proportion of vaccinated people growing, employment in in-person services continued expanding rapidly in April. Many jobs were added in restaurants, hotels and in-person entertainment. Nonetheless, employment in these industries is still well below pre-pandemic levels. In sum, in-person services still have a lot more room to grow, and they will. But overall employment may recover a little more slowly than we thought prior to the release of April’s job numbers.”