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May 2, 2025

Payroll employment rose by 177,000 jobs in April after downward revisions of 58,000 to February and March. The monthly average for the year is 144,000 jobs per month, a slight deceleration from 168,000 per month last year. Public sector employment added 10,000 jobs, with gains in state and local hiring more than offsetting a decline of 9,000 in federal employment.

Federal government jobs are down by 29,000 since January, but more layoffs are in the pipeline. One estimate is that there are 55,000 confirmed cuts, including some retirees. Another 76,000 received buyouts and roughly 150,000 more are likely to be cut.

Workers on administrative leave at the federal level are still counted as employed, even if they are no longer in their jobs. Many of the initial layoffs will not show up until October 1, when those workers are no longer paid. Some were reinstated due to court orders.

Private sector payrolls were driven by an increase of 58,200 in healthcare and social assistance. Most of those gains were in hospitals and outpatient care. Gains in social assistance have slowed, with the exception of childcare, which picked up slightly. Vocational rehab facilities lost employment during the month.

The job gains in healthcare and social assistance are beginning to show signs of slowing. Delays in Medicaid payments and curbs on National Institutes of Health grants are expected to take a larger toll on those gains going forward. Curbs to veterans� programs are in the pipeline.

Employment in transportation and warehousing rose by 29,000. Firms scrambled to stockpile the last in imports from China, which have ground to a near standstill. The leisure and hospitality sector added 24,000, mostly in food services. A later-than-usual Easter helped buoy those gains.

Professional and business services were up 17,000, most of which was in administrative, waste and temporary help. Jobs in financial activities rose 14,000, mostly in real estate, rental and leasing.

Construction added 11,000, split between residential and commercial specialty contractors. Employment in other major industries was little changed. 

Average hourly earnings rose by 0.2% in April, a tick lower than the 0.3% increase we saw in March. That translates to 3.8% from a year ago. Average weekly hours were unchanged at 34.3, the same as an upwardly revised March. Manufacturing hours worked were down, while overtime was unchanged.

Separately, the unemployment rate held at 4.2% in April, the same as March. The participation rate rose to 62.6% and has regained ground lost since January. The increases were across the board, which is welcome news.

Household employment, which is a survey of households instead of establishments, rose by a much stronger 436,000. The ranks of the unemployed rose, but the unemployment rate was held in place by the surge in the ranks of the employed.

An undercurrent among the unemployed

More worrisome were the ranks of permanent job losers, which rose to the highest level since October 2021. Back then, they were on the decline. The median duration of unemployment jumped 6.1%, the fastest increase since June 2024.

The number of those who were unemployed for more than 27 weeks continued to rise and is now 32% above the level we saw in 2019. Hence, the erosion in job security, despite solid job gains.

The number of multiple jobholders fell slightly after hitting a record high in March. Those accepting part-time jobs for economic reasons declined, but the ranks of the self-employed ballooned.

Parents struggle

Those out due to parental leave for the month of April were the highest on record. The data dates back to 2003.  Those out due to childcare problems fell slightly but are coming off record highs in 2024. Childcare costs are rising at more than double the pace of overall inflation.

The situation for working parents will get worse as everything from strollers to car seats and diapers are sourced from China. Many of those imports have come to a standstill given the prohibitive level of tariffs: 145%. Retailers are warning of empty shelves by late May, as many of those items have few substitutes from elsewhere.