There was a lot of important information on the U.S. economy released this week but the biggest data point is without a doubt the latest monthly job report from the Bureau of Labor Statistics (BLS) out this morning. Indeed, total nonfarm employment in America rose by 211K payrolls in April, the 79th monthly gain in a row and much better than economists had expected. April’s quick rebound in payrolls growth also provides evidence that March’s downward-revised 79K increase was just a temporary setback related to negative weather effects, i.e. snowstorms in the Northeast that prevented many Americans from getting to work. Moreover, payrolls growth during the past three months has averaged +174K, well above many Federal Reserve (Fed) officials’ estimates for what is needed to keep up with U.S. population growth.
As for joblessness in America, the official unemployment rate (U-3) fell to 4.4 percent in April, and the underemployment rate (U-6) slid to 8.6 percent, both at the best levels of the current business cycle. At the same time, the labor force participation rate in America ended April at 62.9 percent, a slight pullback from the 12-month high that is likely related to more people reentering the workforce due to increased optimism about their employment prospects. Shifting the focus to wage growth, average hourly earnings rose by 0.3 percent last month, in line with economists’ expectations but the March figure was revised slightly lower. As a result, wages have now increased by 2.55 percent over the past twelve months, the weakest reading for annual growth since May of last year and supportive of Fed officials’ decision on Wednesday to hold steady with interest rates. Here are a few more highlights from the April job report:
- The unemployment rate for leisure and hospitality workers fell to a new all-time low.
- The unemployment rate for high school graduates is down to 4.6 percent, the best reading since November 2007.
- Coal mining jobs are making a comeback.
- Full-time employment as a share of total U.S. employment has finally returned to pre-recession levels.
- A strong rebound in hours worked this year has so far kept total income growth steady.
- The nonemployment rate for men between the ages of 35 and 44 in the U.S. fell to a new cycle low.
- The employment-to-population ratio for prime-age workers has finally regained the previous cycle low.
Sources: Econoday, Bloomberg, Twitter, U.S. DoL, FRBSLPost author: Charles Couch