WASHINGTON-The pace of hiring picked up again in April and the unemployment rate fell to the lowest level in nearly a decade, providing reassurance the broader economy is poised for a strong spring after a lackluster start to the year.
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Nonfarm payrolls rose by a seasonally adjusted 211,000 in April from the prior month, the Labor Department said Friday.
The unemployment rate for April edged down to 4.4% from the prior month’s 4.5% reading. The unemployment rate hasn’t been this low since May 2007–and that matched the lowest rate of any point during the prior expansion. The low rate could keep the Federal Reserve on track to gradually raise it’s short-term interest rate this year.
The historically low rate comes with the caveat that a smaller share of Americans participate in the labor force this year, compared with a decade ago.
Economists surveyed by The Wall Street Journal had expected 188,000 new jobs and a jobless rate of 4.6% in April.
The economy added better than 200,000 jobs during the first two months of the year, but hiring eased in March. Employers added a downwardly revised 79,000 jobs that month, compared with an initial estimate of a 98,000 increase.
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Average hourly earnings for private-sector workers rose 2.5% in April compared with a year earlier. Annual wage gains firmed most of last year, reflecting increased competition for workers amid low unemployment. But the pace of raises slowed since December’s 2.9% increase–the strongest gain since June 2009.
The U.S. labor market has been one of the brightest spots in a long recovery marked by slow economic growth. Payrolls this year have expanded similarly to the strong rate recorded since 2011. Those gains have come despite historically soft economic growth of near a 2% annual rate.
In the first quarter, the economy advanced at just a 0.7% annual pace. However, many economic forecasters are expecting an acceleration to better than 3% growth for the April through June period. The Federal Reserve and other economists project overall growth in 2017 to settle near 2%.
To support better economic growth, especially when productivity gains have been weak, employers need to draw more workers into the labor force.
That could become a challenge because the share of Americans working or seeking work has generally declined the past 15 years, in part reflecting aging of the U.S. population.
The labor-force participation rate in April ticked down to 62.9% from 63% in March. The rate has mostly steadied over the past year, which could reflect, at a minimum, a slower flow of workers leaving the labor force.
An alternative measure of unemployment and underemployment, which includes those who have stopped looking and those in part-time jobs who want full-time positions, was 8.6% in April, versus 8.9% the prior month. It was the lowest level since late 2007.
The rate, designated U-6, averaged 8.3% in the two years before the recession.
April job gains were fairly broad based with strong hiring in professional and business services, health care and leisure and hospitality.
Retailers added jobs in April after two monthly declines. Employment at all levels of government rose by 17,000.
More broadly, the U.S. labor market has added jobs every month since October 2010, a long stretch that has slowly repaired much of the damage from the Great Recession and allowed the Fed to start raising short-term interest rates from near zero.
Central bank officials in this week held short-term interest rates steady, but indicated two more increases could occur later this year. “The labor market has continued to strengthen even as growth in economic activity slowed,” Fed officials said their post-meeting statement.
A low unemployment rate could give the central bank leeway to tighten monetary policy further.
The Labor Department’s employment report can be accessed at: http://www.bls.gov/news.release/empsit.htm
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(END) Dow Jones Newswires
May 05, 2017 08:45 ET (12:45 GMT)