Unemployment drops to 3.9 percent in April

06 May, 2018, 00:03 | Author: Natasha Holloway
  • This year the economy has added an average of 202,000 jobs each month

Employers added a modest 164,000 jobs in April, pushing the nation's unemployment rate down to 3.9 percent, the Labor Department said Friday.

"The big news in this morning's jobs report is that the unemployment rate edged down to 3.9%, the first time it has gone below 4.0% since 2000", Elise Gould, a senior economist at the Economics Policy Institute, wrote in a blogpost.

In all, the number of people receiving aid dropped 77,000 to 1.26 million after April 21. In addition, the so-called "real" unemployment rate, which includes discouraged, other "marginally attached" workers, fell from 8.0 percent to 7.8 percent, the lowest level since July 2001.

Economists polled by Reuters had forecast payrolls rising by 192,000 jobs in April and the unemployment rate falling to 4.0 percent.

The data pushed the dollar up against the pound and euro. The dollar pared losses against a basket of currencies and USA stock index futures trimmed losses.

While average hourly earnings have suggested only a gradual increase in wage inflation, other measures have been more robust.

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In April, employment in professional and business services increased by 54,000. The "all jobs" year-over-year percentage change is now +1.6%, with services at +1.7% and manufacturing, +2.0%. The central bank's key rate is now 1.5-1.75 per cent.

The Federal Reserve is likely to view the stable rate of pay as a sign of support for its cautious strategy of raising US interest rates.

Economists interpreted symmetric to mean policymakers would not be too concerned with inflation overshooting the target. An acceleration could force Fed officials to raise rates more aggressively, which would raise the cost of auto loans and credit card debt.

The US unemployment rate dropped to 3.9%.

The number of unemployed people, at 6.3 million, also dipped over the month. But strong wage growth could fan fears of an uptick in inflation, pushing them toward a fourth increase, Mr. Luzzetti said. Yet wage growth, the key number for stock market investors on edge about more Fed rate hikes, surprised on the downside, coming in at 2.6%. (The record to beat: nine months.) The streak defied the expectations of economists, who said the nation's prolonged hiring blitz - an average of 202,000 new positions each month in 2018 - was bound to drive the figure down.

Scott Paul, president of the Alliance for American Manufacturing, noted that the USA manufacturing sector has gained 166,000 jobs in the past six months. Factories remained a bright spot, adding 24,000 workers to payrolls. The optics of a 3.9% unemployment rate (i.e., breaking through the 4.0% barrier) carry that perception an important step further.

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