The April jobs report is set to reveal a new normal for the US labor market: slower growth. While the expected addition of 65,000 positions might seem like a sharp deceleration, it could be seen as solid or even normal when viewed in isolation. However, the bigger picture reveals a labor market in the throes of an evolution, marked by exogenous shocks and structural changes. The aging US population, reduced net immigration, and technological innovations like AI are reshaping the job market. These factors have led to a volatile rollercoaster ride for the economy, with monthly job gains and losses subject to revision. The birth-death model changes have also contributed to the fluctuations in payroll numbers. Despite the volatility, the consensus estimates align with the average monthly gain of 68,333 jobs from January to March. However, the unemployment rate is expected to remain stable at 4.3%. The 'breakeven' rate, the number of jobs needed to keep the unemployment rate steady, is still being determined by economists and policymakers. The labor market has been described as 'solid', 'resilient', and 'steady', but consumer sentiment surveys show workers and job seekers are more downbeat. The Job Openings and Labor Turnover Survey revealed that hiring bolted higher in March after falling to near-historic lows the month before. However, job openings fell for the second consecutive month, and layoff announcements have picked up speed in the tech industry, with AI cited as the reason for 49,135 cuts. The labor market is shifting, and how we measure it is also changing. The future of the labor market is uncertain, but one thing is clear: the job market will never be the same as it was before 2020.
