With the US economy reeling from pandemic stressors—most notably escalating inflation—the job market is also having trouble finding some stability. According to recent data from April, private employers in the United States hired the fewest number of workers in the past two years. Apparently higher costs and persistent labor shortages are dragging down small businesses the most, suggesting that job growth has slowed, overall.
Specifically, the data concludes that private-sector payrolls increased by 247,000 in April. While that may sound like a lot, it is nowhere near the 479,000 private payrolls registered in March; and the 383,000 that economists had expected in April (according to data from Bloomberg).
This data appears to be in line with what is happening across the labor market as a whole. In a separate survey issued by the Institute for Supply Management, employment in the service sector also showed significant contraction. This is the second April in a row to see losses in this sector. Specifically, the ISM survey described services labor demand remains “hypercompetitive,” most notably because “there is just not enough qualified personnel available.”
Following up on this, government data revealed, on Tuesday this week, the market still has an astounding 11.5 million job openings on the final day of March. This record-setting employment gap increased from 3.1 percent in February to 3.4 percent in March.
In other areas of the job market, leisure and hospitality employers managed to restore 77,000 jobs in April. This was the biggest addition of any industry group but still less than half the numbers seen in March. Furthermore, payrolls in professional and business services rose by only 50,000 in April. This was followed closely by payroll gains of 48,000 in education and health services roles. Finally, big businesses—those with at least 500 workers—added only 321,000 new payroll numbers.