US | The labor market remains resilient amid uncertain times

Summary

Despite rising uncertainty and early signs of cooling, the U.S. labor market remains broadly balanced, driven by services, stable participation, and moderated wage growth. However, risks from policy shifts and slower job openings are building.

Key points

• Key points:
• Private nonfarm payrolls rose by 177K in April, up 1.2% YoY, reflecting steady labor market dynamics. Services—especially healthcare, transport, and finance—led job gains, while federal government jobs declined due to DOGE implementation.
• Wage growth remained moderate, at 3.8% YoY and 2.6% annualized (3-month SAAR), balancing supply constraints and slowing demand.
• Labor force participation stayed at 62.6%, with 518K new entrants, keeping the unemployment rate steady at 4.2%.
• Job vacancy rate edged down from 4.5% to 4.3%, signaling cautious hiring and a gradual easing of labor demand. Small firms report fewer hiring plans, though many still struggle to fill skilled positions, pointing to mismatches.
• The labor market continues to rebalance, with wage growth and job turnover trends aligning with a more stable, pre-pandemic Beveridge curve.

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