Bank of America unveiled its outlook for April's U.S. jobs report on Tuesday, forecasting a gain of 80,000 nonfarm payroll positions for the month. The bank expects private-sector employment to account for most of the expansion, adding 90,000 jobs, according to its labor market preview.
The forecast follows a March reading that surprised to the upside. Bank of America analysts identified education and health care as the principal sources of continued employment growth, noting that adoption of artificial intelligence has been slower in those fields and that demographic trends provide ongoing support.
On labor market indicators, the bank projects the unemployment rate will remain at 4.3% for April, while acknowledging there is a possibility the figure could round down to 4.2%. The labor force participation rate is expected to stay steady at 61.9%.
Claims data for initial and continuing unemployment benefits remained low in April, including during the specific survey week used to compile the monthly jobs report. Despite recent announcements of layoffs in the technology sector, Bank of America says claims data give little sign of widespread increases in separations, implying overall layoffs remain muted.
Labor market measures from payroll processing firm ADP have shown a notable uptick since late March. Bank of America said weekly ADP data point to private-sector job growth in April likely ranging between 120,000 and 160,000, a step up from the roughly 60,000 private jobs added in March. The bank characterized the mix of low claims and elevated ADP readings as producing modest upside risks to its 80,000 payroll forecast.
Seasonal and sectoral effects could also shape April hiring. Warmer weather may bolster employment in leisure and hospitality, trade, transport and utilities, and construction. Bank of America noted that construction hiring might additionally receive support from demand tied to data centers. At the same time, the bank flagged geopolitical uncertainty related to the Iran war as a potential drag on hiring in some areas, specifically pointing to leisure and hospitality and trade and transport as sectors that could be affected.
From a policy perspective, Bank of America stated that an unemployment rate of 4.3% or lower would likely keep the Federal Reserve on hold in the near term, even as inflation risks are rising.
Key data points to watch:
- Bank of America payroll forecast: +80,000 nonfarm jobs for April
- Private-sector forecast: +90,000 jobs
- Unemployment rate projection: 4.3% (possible rounding to 4.2%)
- Labor force participation: 61.9%
- ADP-based private payrolls estimate for April: 120,000 to 160,000