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Strong Jobs Report, But Storm Clouds on the Horizon

Despite employers adding 428,000 jobs in April across a broad number of industries, productivity decreased 7.5% in Q1 2022, the largest decline since 1947, and labor costs increased at an unsustainable 7.2% over the last four quarters, the largest four-quarter increase since 1982.

Telework decreases: In April, 7.7% of employed persons teleworked because of the pandemic, down from 10.0% in March.

  • Finance and insurance (23.2%), Professional and technical services (22.6%) and Information (19.5%) industries had the highest numbers of teleworkers.

Six industries accounted for two-thirds of the April gains:

  • Leisure and hospitality (+78,000);

  • Manufacturing (+55,000)—but manufacturing employment is still down by 56,000 since February 2020;

  • Transportation and warehousing (+52,000);

  • Professional and business services (+41,000);

  • Financial activities (+35,000); and

  • Health care (+34,000)—but health care jobs are down by 250,000 since February 2020.

Small businesses struggling: Separately, ADP reported businesses with less than 50 employees actually lost 120,000 jobs in April, the worst drop in two years.

Outlook: The economy is expected to slow as the Federal Reserve increases interest rates. Unless inflation quickly subsides and employers can get labor costs under control, a recession in 2023 will become more likely than a soft landing.

Published on: May 6, 2022

Authors: D. Mark Wilson

Topics: COVID-19 Employer Issues, Jobs, Skills and Training

D. Mark Wilson

President and CEO, American Health Policy Institute

Detailed Bio

Contact D. Mark Wilson LinkedIn

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