U.S. Hiring Jumps in April; Unemployment Falls to 3.6%
American employers picked up the pace of hiring in April and the unemployment rate fell to a fresh half-century low, adding to signs of a healthy U.S. economy.
Nonfarm payrolls increased a seasonally adjusted 263,000 in April, the Labor Department said Friday. The unemployment rate fell to 3.6% last month, the lowest level since December 1969. Average hourly wages for private-sector workers grew 3.2% from a year earlier, matching the prior month’s increase.
Economists surveyed by The Wall Street Journal had expected 190,000 new jobs in April, a 3.8% unemployment rate, and 3.3% wage growth from a year earlier.
Revised figures show employers added 189,000 jobs in March and 56,000 jobs in February, a net upward revision of 16,000.
Through the first four months of the year, employers added an average of 205,000 jobs to payrolls each month. That’s a slowdown from the robust 223,000 jobs added each month, on average, last year, and roughly in line with the 201,000 added on average during current the 103-month stretch of job creation. The streak, which began in October 2010, is by far the longest on record.
Last month’s hiring was lead by increased employment in professional business services, construction and health care. Employment in retail fell for the third straight month. All levels of government added a net 27,0000 jobs in April.
The unemployment rate fell in part because the number of Americans in the labor force shrank by almost 500,000 in April. The fraction of Americans with jobs or actively looking for work fell to 62.8% in April from 63% the prior month. The rate had slowly crept higher from a multidecade low of 62.4% touched in 2015. The rate still remains below prerecession levels, suggesting the economy has more capacity to draw in workers.
Friday’s report showed a broader measure of unemployment, including those too discouraged to look for work, plus Americans stuck in part-time jobs but who want to work full time, held steady at 7.3% in April. The rate is slightly higher than it was in 2000, even though the headline unemployment rate is lower. That suggests additional workers may yet be available to fill a near-record number of job openings.
In previous cycles, by the time the unemployment rate neared 4%, the number of Americans on the edge of the labor market had also significantly shrunk–and wage growth accelerated more dramatically, said Marianne Wanamaker, a labor economist at the University of Tennessee. There’s evidence that those ranks have yet to thin in the current labor market.
Workers’ wages rose increased 6 cents in April to $27.77 an hour. The annual increase in wages was much stronger than the 2.8% increase in April 2018 from a year earlier. But pay gains haven’t accelerated much further since year-over-year wage growth broke above 3% for the first time in nearly a decade last year.
Friday’s report showed the average work week in April fell to 34.4 hours.
Solid, but not accelerating, pay increases suggest wage pressures aren’t likely to translate into broader inflation in the near term. And workers have been enjoying better pay in real terms, as average raises exceed price increases. The consumer-price index rose 1.9% from a year earlier in March.
Americans rejoining the labor force over the past few years coupled with more efficient workers–labor productivity advanced in the first quarter from a year earlier at the best rate since 2010–could provide necessary fuel to extend one of the longest expansions in the post-World War II era.
The longer-run uptick in labor-force participation and better productivity “does suggest more room to grow,” Federal Reserve Chairman Jerome Powell said at a press conference Wednesday. “It suggests that a less-tight economy may be part of the explanation for lower inflation.”
The Fed held its benchmark interest rate steady following a policy meeting this week, judging the economy to neither be showing signs of overheating or cooling.
Source: Dow Jones