Here’s what to expect from the April jobs report released Friday

Hiring likely continued at a brisk pace in April as investors look for cracks in the labor market that could influence the Federal Reserve.

Nonfarm payrolls are expected to post a gain of 240,000 for the month, according to the Dow Jones consensus which also sees the unemployment rate holding steady at 3.8%.

If this overall figure is accurate, it would actually reflect a slight decline from the average of 276,000 jobs created per month so far in 2024. Furthermore, such growth could reinforce the Fed’s reluctance to cut rates of interest, the labor market’s pace continues and inflation remains above the 2% target set by the central bank.

“There are definitely still tailwinds,” said Amy Glaser, senior vice president of business operations at recruiting site Adecco. “For April, the name of the game is steady-Eddie as resilience continues, and then we look forward to some of the seasonal trends we would expect for summer.”

The job market in April was stronger in the healthcare, leisure and hospitality sectors, Glaser added. These are two of the top job growth sectors this year, with health care adding about 240,000 jobs so far and leisure and hospitality adding 89,000.

However, growth in the coming months could extend to areas such as education, manufacturing and warehousing, part of usual seasonal trends as educators seek alternative employment in the summer and as students leave to look for jobs, she said.

“I don’t expect to see any big surprises this month, based on what I see on the ground,” Glaser said. “But we’ve already been surprised.”

Indeed, the labor market has been full of surprises this year, beating Wall Street estimates at a time when many economists expected hiring to slow. March’s gain of 303,000 shattered forecasts and comes amid a glut of data showing the gig economy remains strong, wages continue to rise and inflation has not moved a lot after falling sharply in 2023.

That has pushed the Fed into a box, as officials are reluctant to start cutting interest rates until they get more convincing evidence that inflation is under control.

Policymakers will examine a number of elements of tomorrow’s report for evidence that job growth is not helping fuel price pressures.

If payroll growth is slightly lower than expected and wage pressures ease as more people enter the workforce, that would be an ideal scenario for the Fed, said Drew Matus, chief market strategist. at MetLife Investment Management.

“The Goldilocks scenario is an increase in the unemployment rate accompanied by an increase in the labor force participation rate,” Matus said. “What this suggests is that there is a little bit of weakness that should translate into less pressure on wages and remove some of the concerns about persistently high inflation levels.”

Markets will also be closely watching wage figures.

Consensus estimates put average hourly wage growth at 0.3% for the month, close to March’s, and the annual increase at 4%, just below the previous month’s 4.1%. However, Matus said the wage figures could be skewed by immigration trends as well as California’s minimum wage increase this year to $16 an hour.

Fed Chairman Jerome Powell said Wednesday that wage pressures had eased over the past year as the labor market moved toward a better balance between supply and demand.

“Inflation has fallen significantly over the past year, while the labor market has remained strong, and that is very good news,” he said during his press conference at the from the last meeting of the central bank. “But inflation remains too high.”

Markets have been in flux as uncertainty over the Fed’s rate path has grown, although Wall Street was in rally mode Thursday, the day before the Bureau of Labor Statistics report was released at 8:30 a.m. ET .

“What you’re seeing in the markets reflects uncertainty about the path forward. Which is going to be more important to the Fed, unemployment or inflation?” Matus said. “If unemployment starts to rise, is the Fed going to worry as much about inflation as it does today? Or vice versa? And I don’t think that even with all the information the Fed is giving us provided, we know that. I don’t know that. I think everyone knows that and I think that’s why you see the market behaving the way it is.