The U.S. jobs machine kept humming along in April, adding a robust 263,000 new hires while the unemployment rate fell to 3.6%.
Nonfarm payroll growth easily beat Wall Street expectations of 190,000 and a 3.8% jobless rate. Average hourly earnings growth held at 3.2% over the past year, a notch below Dow Jones estimates of 3.3%. The monthly gain was 0.2%, below the expected 0.3% increase, bringing the average to $27.77. The average work week also dropped 0.1 hours to 34.4 hours. However, the fall in the rate was due to a large number of people – 490,000 – leaving the labour force during April. The data also showed that the world’s largest economy added a stronger-than-expected 263,000 jobs last month. Wage data showed that average earnings grew at an annual rate of 3.2%.
Hiring gains were seen in nearly all sectors of the economy during April.
- Professional and business services – added 76,000 new jobs
- Construction – added 33,000
- Healthcare – added 27,000
- Social assistance – added 26,000
- Financial activities – added 12,000
However, there was little change in the numbers of involuntary part-time workers. The number of people working part time because their hours had been reduced or because they were unable to find full-time jobs remained at 4.7 million. “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.” April’s big increase comes amid a mostly postive backdrop of economic data. GDP increased 3.2% during the first quarter, far exceding expectations, while productivity during the quarter jumped 3.6% for its best gain in five years. Pending home sales rose 3.8% in March, providing some hope in the real estate market so long as rates are held in check. Earlier this week, the Federal Reserve held the line on its benchmark interest rate, characterizing economic growth as solid even as inflation remains tame. The central bank watches metrics like the nonfarm payrolls report closely for clues both on job creation and wage pressures.