Nonfarm payroll employment increased by 175,000 in April, and the unemployment rate rose 0.1% to 3.9%. Over the last three months, payrolls advanced at an average monthly rate of 242,000.

This is up slightly from the average monthly gain over the last year (234,000 per month). A steady, healthy pace of payroll gains is good news, especially when combined with a slowdown in monthly gains of average hourly earnings (AHE), which rose 0.2% in April. While still above a range that we view to be consistent with 2% price inflation (3.0%-3.5%), AHE is moving in the right direction. The labor market is expected to gradually cool, with the unemployment rate reaching a peak of 4.6% by 2027 and payroll gains slowing to an average of 140,000 over the remainder of 2024 and skilled construction wages will experience growth above 4% through 2025 as labor markets remain tight despite softening demand in 2025 and beyond. New England and New York/New Jersey will see the least upward pressure on wages; these two regions already pay some of the highest wages in the industry.