The Economy

Job Market Bounces Back With 211,000 Gain

“The American job machine returned to form in April,” an economist says as unemployment drops to its lowest level since May 2007.
Matthew HellerMay 5, 2017
Job Market Bounces Back With 211,000 Gain

The U.S. labor market “returned to form” in April as hiring rebounded from a tough March and unemployment dropped to its lowest level in nearly a decade.

The Labor Department reported Friday that employers added 211,000 jobs last month, recovering from a meager, downwardly revised gain of 79,000 in March. April’s increase exceeded this year’s monthly average of 185,000.

The unemployment rate, meanwhile, fell to 4.4%, a 0.1% improvement on March that took it to the lowest level since May 2007.

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The April report apparently confirmed the March numbers were something of a blip that did not reflect the underlying strength of the job market. “The American job machine returned to form in April,” James Marple, senior economist at TD Economics, wrote in a note to clients. “The re-acceleration in jobs should assuage fears that economic growth is slowing in any meaningful way.”

Reuters said the rebound supports the Federal Reserve’s “contention that the pedestrian 0.7 percent annualized economic growth pace in the first quarter was likely ‘transitory,’ and its optimism that economic activity would expand at a ‘moderate’ pace.”

“These developments should keep the Fed firmly on track to hike rates again in June and should motivate a hawkish shift in the interest rate forecasts they will release at that meeting,” said Michael Feroli, an economist at JPMorgan in New York.

After the jobs report was released, futures markets indicated a 78.5% chance that central bank officials would lift interest rates when they next meet in June.

A sharp dropoff in construction hiring, in part due to a snowstorm in the Northeast, had contributed to the disappointing March report. The bulk of the job gains in April came from leisure and hospitality, education and health, and business services but even beleaguered sectors such as mining and manufacturing showed growth.

Other labor market metrics continued to improve in March, with the U-6 rate — a measure of underemployment that includes those who have given up looking for work and who are employed part time but would like to be full time — falling to 8.6%, the lowest level seen since 2007.