Unemployment hits 49-year low as US employers step up hiring

Associated Press

May 3, 2019

FILE - In this March 7, 2019, photo visitors to the Pittsburgh veterans job fair
meet with recruiters at Heinz Field in Pittsburgh.

WASHINGTON  U.S. employers added a robust 263,000 jobs in April, suggesting that businesses have shrugged off earlier concerns that the economy might slow this year and now anticipate strong customer demand.

The unemployment rate fell to a five-decade low of 3.6% from 3.8%, though that drop reflected a rise in the number of people who stopped looking for work. Average hourly pay rose 3.2% from 12 months earlier, a healthy increase that matched the increase in March.

Friday's jobs report from the Labor Department showed that solid economic growth is still encouraging strong hiring nearly a decade into the economy's recovery from the Great Recession. The economic expansion is set to become the longest in history in July.

"The broader economy remains on solid footing, meaning that coming months will see continued job gains and faster wage growth," said Richard Moody, chief economist at Regions Financial Corp.

Trump administration officials insisted that the job market's gains were a result of the president's tax cuts and deregulatory policies.

"We have entered a very strong and durable prosperity cycle," said Larry Kudlow, director of the White House's National Economic Council.

President Donald Trump has also pressed the Federal Reserve to cut short-term interest rates because inflation remains low. But most economists said the healthy jobs picture, against the backdrop of low inflation, would reinforce the Fed's current wait-and-see approach. The Fed raised rates four times last year but has signaled that it doesn't foresee any rate increases this year.

Stock investors welcomed Friday's jobs data. The Dow Jones Industrial Average rose 135 points, or 0.5%, in mid-day trading.

The brightening economic picture represents a sharp improvement from the start of the year. At the time, the government was enduring a partial shutdown, the stock market had plunged, trade tensions between the United States and China were flaring and the Fed had just raised short-term rates in December. Analysts worried that the economy might barely expand in the first three months of the year.

Yet the outlook soon brightened. Chair Jerome Powell signaled that the Fed would put rate hikes on hold. Trade negotiations between the U.S. and China made some progress. The economic outlook in some other major economies improved. Share prices rebounded.

And in the end, the government reported that the U.S. economy grew at a 3.2% annual rate in the January-March period the strongest pace for a first quarter since 2015. That said, the growth was led mostly by factors that could prove temporary a restocking of inventories in warehouses and on store shelves and a narrowing of the U.S. trade deficit. By contrast, consumer spending and business investment, which more closely reflect the economy's underlying strength, were relatively weak.



But American households have become more confident since the winter and are ramping up spending. Consumer spending surged in March by the most in nearly a decade. A likely factor is that steady job growth and solid wage increases have enlarged Americans' paychecks.

Businesses are also spending more freely. Orders to U.S. factories for long-lasting capital goods jumped in March by the most in eight months. That suggested that companies were buying more computers, machinery and other equipment to keep up with growing customer demand.

Many businesses say they're struggling to find workers, yet each month they seem to add a substantial number. Some have taken a range of steps to fill jobs, including training more entry-level workers, loosening educational requirements and raising pay sharply.

Years of steady hiring have sharply lowered unemployment for a range of population groups. The unemployment rate for women fell last month to 3.1%, the lowest point since 1953. The rate for Latinos dropped to 4.2%, a record low since 1973, when the government began tracking the data.

For Asians, joblessness has matched a record low of 2.2%. And the unemployment rate for veterans of the Iraq and Afghan wars dropped to 1.7%, also a record low.

Most of last month's job growth occurred in services, which includes both higher-paying jobs in information technology and lower-paying temporary work. Manufacturers added just 4,000 jobs. Construction firms gained 33,000, mostly on public infrastructure projects.

Professional and business services, which include IT networking jobs as well as accountants and engineers, led the gains with 76,000. Education and health care added 62,000 jobs, while a category that mostly includes restaurants and hotels gained 34,000.

Retailers, however, continued to cut jobs, shedding 12,000 in April, the third straight months of cuts. The sector has eliminated 49,000 jobs in the past year even as the economy has picked up.

Retailers are suffering from broader changes in the economy as more Americans are shopping online and stores close after decades of overexpansion. Also to blame is an aging U.S. population that no longer needs to buy as much clothing and other goods.


Where people found jobs: Business services and construction

Professional and business services helped drive a big jump in hiring in April. That sector added 76,000 positions, accounting for nearly 30 percent of the month's additional jobs. The category includes higher paying positions, including computer systems design, scientific research, consultants and administrative support.

Education and health added 62,000 jobs last month, with hospitals, physicians' offices, senior care facilities and family services stepping up hiring. Construction companies added 33,000 jobs, with most of those gains driven by non-residential specialty trade contractors.

Sectors on the losing end in April were retail and information, a category that includes telecommunications, broadcasting and motion pictures.

Overall, U.S. employers added 263,000 jobs in April. The unemployment rate declined to 3.6 percent, the lowest level since 1969, the Labor Department said Friday.

Industry (change from previous month) April 2019 March 2019 Past 12 months
Construction 33,000 20,000 256,000
Manufacturing 4,000 0 204,000
Retail -12,000 -15,700 -49,100
Transportation, warehousing 11,100 2,400 176,200
Information (Telecom, publishing) -1,000 7,000 -15,000
Financial services 12,000 13,000 110,000
Professional services (Accounting, engineering, temp work) 76,000 24,000 535,000
Education and health 62,000 69,000 588,000
Hotels, restaurants, entertainment 34,000 37,000 455,000
Government 27,000 10,000 126,000
Source: Labor Department

 

Jobless rate for women hits lowest level since 1953

WASHINGTON  Several demographic groups benefited from strong job gains in April, including women, Asians and Hispanics.

The jobless rate for adult women fell to 3.1%, the lowest level since 1953. The rate for Americans of Hispanic or Latino ethnicity, which can include all races, dropped to 4.2% the lowest level on records since 1973.

Asians posted a jobless rate of 2.2%, which matches a low hit in May 2018.

The jobless rate for veterans of the wars in Iraq and Afghanistan tumbled to 1.7%, the lowest level on records since 2006. That decline was due both to more veterans finding jobs and others no longer looking for work and therefore not counted as unemployed.

The Labor Department said Friday that all told, employers added a robust 263,000 jobs in April. The overall unemployment rate fell to 3.6 percent, the lowest level since December 1969.

The data for demographic groups came from a survey of households that is part of the Labor Department's monthly jobs report.

Unemployment rate by group:
(Numbers in percentages) April 2019 March 2019 April 2018
White 3.1 3.4 3.5
Black 6.7 6.7 6.5
Asian 2.2 3.1 2.8
Hispanic or Latino ethnicity* 4.2 4.7 4.8
Adult men 3.4 3.6 3.7
Adult women 3.1 3.3 3.5
Teenagers 13.0 12.8 13.0
20-24 years old 6.5 7.2 6.7
25-54 years old 3.0 3.2 3.4
55 and over 2.6 2.7 3.0
Veterans of Iraq/Afghanistan* 1.7 xx 4.9
No high school diploma 5.4 5.9 5.8
High school graduate 3.5 3.7 4.3
Some college 3.1 3.4 3.4
College graduate 2.1 2.0 2.1
Duration of Unemployment:
Average length (weeks) 22.9 22.2 23.0
Jobless 6 months or more (pct.) 21.1 21.1 20.4
*Includes all races
Source: Labor Department