BLS Reports Lowest Unemployment in 50 Years

5/8/2019
 

U.S. employers added a much-better-than-expected 263,000 jobs in April, and the unemployment rate dropped to 3.6 percent, the lowest since December 1969, according to the latest Bureau of Labor Statistics (BLS) report.

"The strong rate of jobs growth is remarkable at this point in the recovery," said Julia Pollak, a labor economist at employment marketplace ZipRecruiter. "With the three-month average now at 169,000, there is little indication that the pace of job growth is slowing down."

And that figure includes the abnormally low total from February, revised up from 33,000 new jobs created to 56,000.

Martha Gimbel, research director for Indeed's Hiring Lab, pointed out that there have been fewer than 25 months in the decade-long recovery with stronger job growth. "Jobs continued to grow fastest in middle- and high-wage industries, while wage growth was fastest in low-wage industries."

She also cautioned against expecting "eye-popping jobs numbers like this to continue" throughout 2019. "Year-over-year job growth in the goods sector is continuing to slow down, which, moving forward, could pull down job growth numbers."

Employment data from the ADP Research Institute and Moody's Analytics showed 275,000 jobs added in April. "The job market is holding firm, as businesses work hard to fill open positions," said Mark Zandi, Moody's chief economist. "The economic soft patch at the start of the year has not materially impacted hiring."

The bulk of the overall growth is with service providers in sectors such as business services and health care, adding the strongest gain in more than two years, added Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.

Unemployment Drops Across Categories

April marks the 14th consecutive month of the unemployment rate being at or below 4 percent. The number of unemployed people decreased by 387,000 to 5.8 million over the month.

The joblessness rate fell across nearly all demographic categories, including men (3.4 percent); Asians (2.2 percent); those with only a high school degree (3.5 percent); people with disabilities (6.3 percent); and veterans (2.3 percent).

Unemployment declined for Hispanics (4.2 percent) to the lowest point since 1973 and for women (3.1 percent) since 1953. Unemployment for blacks showed little change at 6.7 percent.

“The tight labor market has created more opportunities for women, even in sectors traditionally dominated by men, such as transportation, construction, police and security, which, along with other protective service jobs, has seen women’s participation grow more than 40 percent since 2000,” said Rebecca Henderson, CEO of Randstad Sourceright, a global talent acquisition, consulting and outsourcing firm. “In this job market, employers are giving female workers a chance they would not have otherwise, which could eventually facilitate more long-term gender balance, both in what are viewed as traditionally male roles and in the overall workplace."{

A broader measure of unemployment that captures the underemployed as well as those who have stopped looking for work, called U-6, held at 7.3 percent, the same level since February.

But there are still some workers not fully benefiting from the economic recovery, Gimbel said. "The long-term unemployment rate remains almost twice what it was in the early 2000s, and the share of the labor force working part-time but would prefer full-time work remains elevated above its low in the previous recovery."

Meanwhile, the labor force participation rate fell slightly from March to 62.8 percent but was unchanged from the prior year. "A demographic wave of retiring Baby Boomers has been pushing that rate downward for years," said Andrew Chamberlain, chief economist at Glassdoor.

"Although the labor force shrank, the number of labor market reentrants and new entrants held fairly steady, which suggests the labor market does not yet appear to be tapped out," Pollak said.

Business Services, Construction Lead Sectors

Employers in professional and business services added 76,000 jobs in April, with most gains coming from administrative and support services and in computer systems design.

Construction employment rose by 33,000 jobs, mostly in nonresidential specialty trade contractors (22,000 jobs).

Employment in health care grew by 27,000 in April and 404,000 over the past 12 months. Financial activities employment continued to trend up, with 12,000 jobs added. The industry has added 110,000 jobs over the past 12 months, with almost three-fourths of the growth in real estate and rental and leasing.

Positions in the manufacturing sector grew by 4,000 in April, reversing a decline of 6,000 seen in March. Retailers shed 12,000 jobs, mostly in general merchandise stores.

Government employment (27,000 jobs added) may have been temporarily boosted in April by a federal hiring surge ahead of the 2020 Census, Chamberlain said.

"While the economy's fortunes have picked up this spring, not all sectors are moving the job market forward," Chamberlain said. "Most job gains so far in 2019 have largely been carried by health care, professional services, and leisure and hospitality. Those three sectors accounted for roughly 69 percent of all job gains during the first quarter of this year. Without question, the leading sector driving hiring today is health care. And when reading the tea leaves about the economy's future, as goes health care so goes the broader job market in 2019."

Wages Continue to Rise

Average hourly earnings increased 6 cents in April to $27.77. Over the year, average hourly earnings have increased by 3.2 percent. "That's the same pace recorded in March and reflects continued moderate pay gains despite growing labor shortages across the nation," Chamberlain said.

"Wage growth has now been above 3 percent for nine months, driven by tightening labor markets, business confidence and the largest increase in labor productivity in nearly a decade," Pollak said. "Wage growth continues to be strongest for service-sector employees and for nonmanagers."

 
 
 
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