US Unemployment Rate Falls to Near 50 Year Low, 263K Jobs Added in April
WASHINGTON, DC — The US labor market keeps getting stronger.
Employers added 263,000 jobs in April, another surprisingly strong month of hiring. Economists surveyed by Refinitiv expected the economy to add only 185,000 jobs last month.
The unemployment rate fell to 3.6%, the lowest level since December 1969.
Indications of strength of the labor market could be found throughout the report. The average hourly wage was up 3.2% compared to a year ago, well above the 1.9% rise in prices, meaning real gains in the paychecks of average workers.
Some of the strongest sectors for hiring included the construction industry, which added 33,000 jobs, and health care, which added 27,000 jobs. Restaurants and bars added 25,000 jobs.
If anything, one of the greatest headwinds for the labor market right now is a lack of workers to fill the job openings that employers have. The unemployment rate fell partly because the size of the labor market contracted slightly during the month.
Still hiring has hummed along at an impressive pace, far longer than many economists had expected.
“Even as some gauges of the strength of the economy have disappointed, job market conditions remain a very bright spot,” said Jim Baird, chief investment officer at Plante Moran Financial. “Job creation remains solid, and should provide continued support for consumer spending sufficient to keep the economy on a solid growth path.”
Typically when unemployment gets this low and wages start to rise, hiring can level off. The higher wages can discourage employers from adding more workers, or even lead them to invest in labor saving devices. Self-serve kiosks at fast food restaurants and robot janitors at Walmart, the nation’s largest private sector employer, are examples of this.
Even with the strong report, some economists continue to believe that hiring is likely to slow in the coming months. Michael Pearce, senior US economist for Capital Economics pointed to a slight decline in the average work week and the lower percentage of the overall population that is either working or looking for work as signs of some weakness just below the surface.
“The labor market is not quite as strong as that decent headline gain implies,” he wrote in a note Friday. “We still expect a slowdown in economic growth over the rest of the year to drag payroll employment growth lower.”
Still, another strong report is undoubtedly good news for President Donald Trump, who saw his approval rating for his handling of the economy rise to 56% in the most recent CNN poll, the highest mark of his tenure.
But the strength of the job market stretches back to before he took office. This is the 103rd straight month that the economy has added jobs. And it is the 31st straight month that the unemployment rate has remained below 5%.