• The rebound in payroll growth in April suggests that the slowdown in March was at least partly temporary, although we would have expected even more of a bounce back last month (1). Nevertheless, the unemployment rate continues to trend lower, hitting 5.4% in April, and the rising proportion of firms saying that jobs are hard to fill suggests the unemployment rate could soon fall to 5.0% (2).

• Other labour market indicators have remained generally upbeat, with initial jobless claims showing a clear downward trend over the past couple of months (3). The rate of job openings remained high in March and the rate of voluntary job quits is still on an upward trend (4). Finally, the ISM non-manufacturing employment index is at a level consistent with monthly gains in services payrolls of slightly less than 250,000 (5).

• The employment cost index points to a clear pick-up in wage growth, although the alternative average hourly earnings measure, which doesn't adjust for shifts in industries and occupations, suggests that wage growth remains muted (6).