The US Bureau of Labor Statistics reported on Friday that the labor market grew by 177,000 jobs in April, with average hourly wages increasing by 3.8% year-over-year as the unemployment rate sat at 4.2% from March.
Glassdoor Senior Economist Daniel Zhao evaluates the tone of the labor market as companies slow down their hiring and consumers reevaluate their spending amid concerns of slowing wage growth.
Also, catch Yahoo Finance's full interview with United States Secretary of Labor Lori Chavez-DeRemer and her reaction to the jobs growth seen in recent months under the second Trump administration.
To watch more expert insights and analysis on the latest market action, check out more Wealth here.
From the CEOs that we've spoken with here at Yahoo Finance over the course of this earning season, it seems like they're not talking about massive layoffs or restructuring the same way they were a few years back, but they are saying we might hire less. And that's starting to show up in some of the job postings as well. What are you seeing at Glassdoor?
Well, I think it's a great point that when we're talking about a recession and economic downturn and how that impacts employees, how that impacts job seekers, it's not just about layoffs. Slower hiring can have a significant impact because it means that that new grad can't get their first job out of school. It means a working parent coming back into the workforce can't find a job, and that person who's currently employed can't get a promotion. So I think it's really important that we think about the impacts of slower hiring, and that is something that we are hearing from business leaders that uh with how much economic uncertainty there is right now, it's impossible to make investment plans, hiring plans, especially if you're in a sector that is affected by these tariffs.
And so with all of that in mind as you're thinking through some of the keys to watch for, what are showing up and translating from an unemployment report into consumer sentiment as well and consumer confidence, because that's where it does come into the mind of consumers what their business prospects may look like in order for them feeling confident about actually uh expending or or spending some of those dollars as well here. What are you keeping tabs on?
Well, for the job market, we don't even need to necessarily go through consumer confidence, consumer sentiment, because this is how people make money, right? So if people are laid off, if if wages don't grow quite as quickly, then that's certainly uh going to have an impact on consumer spending. Uh we talked a lot during during the Covid recovery about the the savings that were kind of built up over uh the course of the pandemic. Uh a lot of those savings have been drawn down now. And so if we do see layoffs, if we do see wage growth slow down, then that can impact consumer spending uh pretty pretty quickly.
And so, as we're thinking through what this all means for the Fed,
how are you anticipating that after prints like this, their tone may start to look for a trend more broadly before they feel comfortable cutting interest rates?
Well, today's report would have been pretty good for the Fed, I think, absent all of the tariff discussion because you saw pretty strong jobs growth, no sign that unemployment's ticking up, wage growth isn't showing any signs of inflationary pressure. And so the Fed, just in isolation seeing this report, probably feels pretty good about getting inflation back down towards the 2% mark. But of course, the big shoe waiting to drop is tariffs, right? And the Fed has signaled that they aren't going to make a sudden shift in policy until they get more information about how tariffs are going to play out, whether they affect the uh employment side of their mandate or it affects the uh inflation side of their mandate.
And so what is the report today, especially as we were looking through the the one perhaps light spot was wage growth year over year. As you're looking through what people are making at the end of the day and that keeping pace or outpacing inflation, how should workers who are also consumers read into that part of the broader print here?
Well, so a little bit of that softness in the wage growth is coming at a time that is is going to be tough for American households, right? Because they're they're getting hit by the softening wage growth at the same time that uh prices are expected to increase because of these tariffs. So this is the to to to really bring it down to the individual person, this is a great time to really re-evaluate your budget, figure out what what's essential, what's not essential, um and really essentially, you know, hunker down a little bit, prepare, and maybe do some of that planning out into the future to to see what your budget can afford.
