The unemployment rate is down
- Author: Anthony Vega May 06, 2018,
May 06, 2018, 16:42
US employers have picked up hiring last month, bringing the unemployment rate down to its lowest level in more than 15 years.
Nonfarm payrolls increased by 164,000 jobs last month, the Labor Department reported.
On other economic news, the final reading of US Consumer Sentiment Index came in at 98.8 in April, above market estimates, according to a survey released by the University of MI on Friday.
The national unemployment rate fell to 3.9 percent, the first time it has fallen below 4 percent since the year 2000 and well below the pre-recession average of 5.3 percent.
Despite the ultra-tight jobs market, wages for American workers still aren't rising rapidly.
So the sudden fall in the jobless rate means the total size of the labor force was not increasing, which is likely to make it harder to find workers and could drive up inflation.
The US unemployment rate dropped to 3.9%. The 10-year Treasury yield TMUBMUSD10Y, -0.15% were little changed at 2.94%. - BNP Paribas U.S. economics team.
Average hourly earnings have risen 2.6% from a year ago.
Average hourly pay for all employees on private nonfarm payrolls increased by 4 cents, to $26.84.
Employers nationwide report the pool of available workers is drying up, forcing many to raise wages to attract qualified candidates, which raises concerns about inflation. More employers, including blue-collar firms, are offering larger bonuses (which do not show up in the government's wage data).
The Fed has set an annual inflation target of 2%.
"The first drop in the unemployment rate in six months was the result of a shrinking labor force", Duncan said. That, together with a shortage of skilled workers, should put upward pressure on wages in the months ahead, economists say.
The economy needs to create roughly 120,000 jobs per month to keep up with growth in the working-age population. (The record to beat: nine months.) The streak defied the expectations of economists, who said the nation's prolonged hiring blitz - an average of 202,000 new positions each month in 2018 - was bound to drive the figure down.
In Alaska, March was the 29th consecutive month of job losses recorded by the State Department of Labor and Workforce Development.
Economic analysts had predicted a gain of more than 190,000 jobs in April.
The retail sector added 1,800 jobs.
"The moderation in job gains over the past two months may mark the beginning of the slow deceleration to a sustainable pace of job gains, which we estimate to be around or a little below 100,000 per month", said Michael Feroli, an economist at JPMorgan in NY. "3.9% Unemployment. 4% is Broken!" he said on Twitter.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc.
Information for this article was contributed by Jim Puzzanghera of the Los Angeles Times; by Josh Boak of The Associated Press; and by Katia Dmitrieva of Bloomberg News. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication. It is not a solicitation to make any exchange in commodities, securities or other financial instruments.