The Economy

Unemployment Dips to Lowest Level in 50 Years

A second straight month of strong U.S. job growth is "further evidence that February’s paltry 56,000 increase in jobs was an aberration."
Matthew HellerMay 3, 2019

U.S. employers kept hiring at a robust pace in April while unemployment dipped to the lowest level in half a century.

The Labor Department reported Friday that employers added 263,000 jobs last month with gains across nearly all sectors. Economists had expected nonfarm payrolls rising by 185,000 jobs.

Payrolls have now risen for 104 quarters in a row, and the economy has created more than 20 million jobs since the Great Recession ended in 2009.

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The March gain was revised downward to 189,000 but according to Reuters, the second straight month of strong job growth “was further evidence that February’s paltry 56,000 increase in jobs was an aberration.”

Additionally, unemployment fell 0.2% to 3.6% in April, the lowest rate since December 1969. “No matter how you slice and dice this, it looks like the economy is doing fine,” Torsten Slok, chief international economist at Deutsche Bank, told The New York Times.

Earlier in the year, analysts were concerned about U.S. economic growth, citing headwinds such as a slowdown in Europe, the trade war with China, and Brexit. But gross domestic product increased 3.2% in the first quarter, well above forecasts, and while inflation pressures remain muted, the Federal Reserve believes core inflation will move back to 2% later this year.

The April jobs data “effectively put to rest concerns about a recession and diminish expectations of an interest rate cut this year,” Reuters said.

While economists have been concerned about slow wage growth — which suggested the recovery was producing few high-paying positions even as payrolls expanded — average hourly earnings rose six cents, or 0.2 percent, in April after rising by the same margin in March. On an annualized basis, wages increased 3.2%.

The decline in unemployment reflected a big drop in the number of people who said they were looking for work, with the labor-force participation rate falling to 62.8% from 63% in March.

“The lower participation rate is a little bit of a disappointment but it’s a volatile number,” said Michelle Meyer, head of United States economics at Bank of America Merrill Lynch.