The US jobs market appears to be going strong, adding another 263,000 new hires to drive the unemployment rate down 3.6 percent. The Department of Labor is the lowest unemployment in a generation. More specifically, nonfarm payrolls grew at a rate that easily surpassed Wall Street expectations, which had been 190,000 and a jobless rate of 3.8 percent.
In other numbers, average hourly earnings grew 3.2 percent over the year, which is only slightly off the Dow Jones estimate of 3.3 percent. Also, the monthly gain was 0.2 percent, also slightly below the expected increase of 0.3 percent. This brings the average to $27.77 with an average work week shedding 0.1 hours, to 34.4 hours.
The last time US unemployment was this low was December 1969. That month, in that year, unemployment hit 3.5 percent. This time, though, economists are looking at a very tight labor market with big job growth coming out of economic expansion that is only a few months away from setting a record streak.
Another way to look at this is to observe the monthly shifts. Unemployment plummeted by 387,000 in April, to 5.8 million. At the same time, though, employment shed about 103,000. Some sectors, of course, did better than others with professional and business services leading job creation with 76,000. The construction sector came in at about half that.
Health care saw growth of about 27,000—to bring its year total to 404,000 new jobs—with positions in finance growing 12,000. Also, social assistance grew by 26,000 and manufacturing added about 4,000. Retail, in fact, was the only sector to suffer a loss—of 12,000—but that is not surprising in today’s e-commerce society.
In a comment, AllianceBernstein senior economist Eric Winogard said, “Leaving aside month-to-month fluctuations, the labor market is still very strong, adding almost double the number of workers needed to keep pace with new entrants to the labor force in any given month. Wages may have been slightly tepid this month relative to expectations but are still growing at just about the highest rate this cycle, and the unemployment rate is at multi-generational lows.”