April jobs report tops expectations, unemployment rate falls to 4.4%
Friday - 05/05/2017 09:20
The U.S. labor market topped expectations in April.
In April, the U.S. economy added 211,000 jobs and the unemployment rate fell to a new post-crisis low of 4.4%. This is the lowest unemployment rate since May 2007.
Wages, which are closely tracked by the Federal Reserve, rose 0.3% month-on-month, as expected. The the annual increase in wages, however, disappointed with wages up just 2.5% over the same month last year. Economists had expected a 2.7% increase in wages over the prior year. Weekly hours worked were steady at 34.4.
The U-6 unemployment rate, also known as the underemployment rate, fell to 8.6% after hitting a post-crisis low of 8.9% in March. Last month, Gary Cohn, President Trump’s chief economic advisor, said the administration is focused on the underemployment rate.
Following the report, U.S. stock futures were little-changed. Treasury yields were also little-changed, with the 10-year sitting near 2.35% and the 2-year near 1.31%.
Friday’s report also showed that manufacturing payrolls grew by 6,000 in April, though the labor force participation rate — which had been stabilizing in recent months — fell to 62.9%. March’s report, which initially showed the economy added 98,000 jobs during the month, was revised down to show just 79,000 jobs were added. Over the past 3 months, job gains have averaged 174,000.
Also notable is that retail sector jobs, which had plunged in recent months, were up by a little more than 6,000 in April. The biggest additions were from leisure and hospitality jobs, which rose by 55,000, and education and health services jobs, up 41000 in April.
“The U.S. job market is in solid shape, with underlying job growth of around 175,000 per month,” said PNC chief economist Gus Faucher.
“This is about double underlying labor force growth, and thus labor market slack continues to diminish, pushing up wages… With continued solid job growth, the U.S. economic expansion will continue throughout 2017.”