Photo by Clem Onojeghuo

It doesn’t appear as though the jump in energy prices has yet had much effect on the labor market, as the economy added 115,000 jobs in April. Year-over-year wage growth was 3.6 percent, which is likely to be roughly even with the inflation rate that will be reported next week. The unemployment rate was unchanged at 4.3 percent, with little change for most demographic groups.

Health Care and Social Assistance Again Dominate Job Growth

The job growth was again concentrated in the health care and social assistance category, which added 53,900 jobs in April. Over the last year this category has added 656,500 jobs, accounting for well over 100 percent of all job growth over the period.

Other big gainers were the courier category (think Amazon), which added 37,900 jobs, and retail trade, which added 21,800 jobs. The courier category is always erratic. It reportedly lost 44,000 jobs in February; the April figure put employment just 15,600 above the January level. The rise in retail employment follows an increase of 18,600 in March. If this continues it would be a serious reversal in a sector that had been shedding jobs for most of the last two years.

The restaurant sector added 17,200 jobs, somewhat better than its average of 11,200 jobs over the last year. This seems to indicate that higher gas prices are not yet discouraging people from spending in discretionary areas. On the other hand, jobs in hotels fell by 15,000, but this followed an unusual increase of 12,300 in March, so it could just be random noise.

Goods Sector Shows Weakness

The goods sector looked extraordinarily strong in March, with employment in manufacturing rising by 15,000 after it had been shedding jobs all through 2025, and construction adding 26,000 jobs. The story is less positive in April. Manufacturing lost 2,000 jobs in the month. It now accounts for 7.9 percent of total employment. Construction added 9,000 jobs, but the March gain was revised down to 16,000. Employment in the sector is up just 50,000 YOY, an average of 4,200 a month.

Employment in mining and oil and gas extraction rose by 2,500 in April, but it is still down by 11,700 from its year-ago level. It’s too early to see much of an impact of the war-related jump in oil prices.

Motion Picture Industry Continues to Shed Jobs

The motion picture industry lost another 6,000 jobs in April. Employment is now down 127,300, 27.9 percent, since its peak in November 2022. The federal government also shed jobs in April, losing another 9,000 jobs. State and local government employment was little changed, with state employment up by 1,000 and local employment flat.

Wage Growth at 3.6 Percent

Year-over-year wage growth was 3.6 percent in April. This is likely to be very close to the Consumer Price Index inflation rate that will be reported next week. The growth in the average hourly wage has slowed from slightly over 4.0 percent for most of 2023 and 2024. This series is also consistent with the slowing in the Employment Cost Index and the Indeed wage data, so it is almost certainly real. With inflation accelerating due to tariffs and the war, it means real wage growth has fallen to near zero.

On the plus side, there seems to have been a modest pickup in wage growth at the bottom of the wage ladder. Wages for nonsupervisory workers in restaurants have risen 4.4 percent YOY.

Household Data Are Mostly Healthy

Most of the data in the household survey are consistent with the relatively low 4.3 percent unemployment rate. The employment rate for prime-age workers (ages 25–54) was unchanged at 80.7 percent for the third consecutive month, just 0.2 percentage points below its peak for the recovery. There was an increase of 445,000 in the number of people working part-time involuntarily, but this is still almost 400,000 below the December level.

The one item that is notably out of line is the share of unemployment due to voluntary quits. This fell back to 11.3 percent from 12.4 percent in March. It had averaged over 13 percent in the strong pre-pandemic labor market. This is consistent with the low quit rate reported in the Job Openings and Labor Turnover Survey data. This suggests that workers do not feel confident about their prospects in the current labor market.

On the plus side, all the duration measures of unemployment improved. The average and median duration of unemployment spells both fell, as did the share of long-term unemployed (more than 26 weeks).

Employment Picture for College Grads Improves

Many of us had noted that college grads were seeing near-recession levels of unemployment, with the rate hitting 3.0 percent in January and February, compared to a rate close to 2.0 percent for 2022 and 2023. The rate has fallen slightly to 2.8 percent in March and April. Perhaps more importantly, their employment to population ratio (EPOP) has risen to 69.8 percent, up from 69.3 percent in January. That is still well below the recovery peak of 71.9 percent, but at least it indicates there does not seem to be a downward trend.

On the other side, the unemployment rate for workers without a high school degree rose from 5.9 percent to 6.4 percent, while their EPOP fell from 44.0 percent to 42.1 percent. Both numbers are highly erratic. The unemployment rate had been higher at several points in 2025, but the EPOP is the lowest since June 2022.

Unemployment Rate for Black Workers Rises to 7.3 Percent

The unemployment rate for Black workers rose to 7.3 percent in April from 7.1 percent in March. This is still the replenishment of well below the 8.2 percent rate hit in November, but far above the 4.8 percent low hit in 2023. By contrast, the unemployment rate for whites in April was just 3.7 percent.

The unemployment rate for young workers (ages 20–24) jumped from 6.4 percent to 7.2 percent. That is still down from a peak of 9.2 percent hit last September.

Solid April Report: Rising Energy Prices Have Not Yet Hit Home

The April jobs data is mostly pretty solid. The unemployment rate remains steady at a relatively low level. There remain some reasons for concern. The unusually low share of unemployment due to quits indicates workers are pessimistic about their labor market prospects. The slowing wage growth is also a concern in the context of rising inflation. If real wage growth falls to zero, it is hard to see how demand in the economy can sustain its growth pace. But for now, the solid job growth in April is a good story.

This first appeared on Dean Baker’s Beat the Press blog.