April’s employment data concludes a busy week of economic news.
The US labor market has sent mixed signals prior to its employment report in April, with layoffs surge in tumbling and unemployment claims.
So far, the US-based employer has announced more than 602,000 pay cuts, up 87% from the first four months of 2024. This is the highest total since the start of the coronavirus pandemic.
Government staff cuts have been at the heart of Challengers’ monthly data. In April, other industries either accelerated planned layoffs or reported limited employment intentions, said Andrew Challenger, senior vice president of the organization.
“Employers will slow down employment plans, limit employment plans, and see what happens in trade, supply chain and consumer spending,” he said in the report.
The technology sector announced its largest number of layoffs in April, with a total cut of 27,021, up 79% from March. This was followed by healthcare (7,654), retail (7,235), non-profit (5,453), media (3,605), and government (2,782).
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Still, the government continues to lead all sectors of employment cuts planned for 2025 at 282,227.
Employers cite a variety of reasons for the cuts. The most common were the government’s efficiency-related department and the “impact of Doge Downstream.” The companies also listed the markets, economic conditions, and tariffs.
Despite the employment cuts and surprises surrounding wider uncertainty, corporate employment plans have increased over the past year. Last month, employers announced their intention to fill 16,191 positions. This has increased by 65% from a year ago.
First unemployed claims rise
Unemployment rates hit its highest level in two months after a few weeks of slight changes.
This was higher than the consensus forecast of 224,000.
Headline numbers show dramatic increases, but deeper diving shows that it was driven primarily by higher bills in New York (15,525) and Massachusetts (3,251).
The unemployed claims are a gauge representing the number of people currently receiving unemployment benefits, struck by 83,000 people, the highest since November 2021.
The four-week unemployment average removes weekly volatility and increases from 220,500 to 226,000.
Additionally, the first widely monitored unemployment claim filed under the program for federal workers fell to 470 by 187.
Main Event: April Jobs Report
All eyes are in the April employment data released on May 2nd.
“Tomorrow’s employment report is important to the market, because it will likely help to confirm the fear of slowing/recession (and hit stocks like yesterday) or push them back (and possibly fuel bounce,” Sevens Research Report president and founder Tom Essaye said in a note in the Epoch Times.
A sign for the Job Fair on 5th Avenue after the employment report was released in New York City on September 3, 2021. Andrew Kelly/Reuters
Additionally, the median estimate of unemployment is 4.2%, slightly above the 12-month average of 4.1%.
Marketwatchers are waiting for the worsening business and consumer sentiment to be shown in hard data. The first quarter GDP report may have been the first indicator to illuminate tariff-related harmful effects on the US economy.
From January to March, the US economy contracted 0.3%, mainly caused by a surge in imports and a decline in government spending. However, consumer spending and exports rose at a healthy pace, and private investment in the national economy skyrocketed.
It’s not a major indicator, but it’s another part of the economic puzzle, says Siebert Financial Cio Mark Malek.
“It’s a stable series. So, if we actually begin to show a significantly declined decline, we can more confidently predict labour market slack. It’s certainly a factor in economic decline,” Marek told the Epoch Times in a memo sent by email.
“Movement and risk to the economic outlook is growing between the GDP report, April ADP report and last month’s pullbacks of business and consumer surveys,” said Bill Adams, chief economist at Comerica Bank, in an epoch-era memo.
