FLASH: The Trump Economic Policies Are Working
US job growth spiked in April and the unemployment rate dropped to near 50 year lows at 3.6%, pointing to solid economic growth.
The Labor Department’s closely watched monthly employment report Friday showed steady wage gains last month, consistent with moderate inflation.
The decline in the unemployment rate was because people left the labor force, suggesting a bit of slack in the jobs market remains.
The report was supportive of the Fed’s decision Wednesday to keep interest rates unchanged and signal little desire to adjust monetary policy anytime soon.
Fed Chairman Powell described the economy and job growth as “a bit stronger than we anticipated” and inflation “somewhat weaker.”
NFPs increased by 263,000 jobs last month, on gainers in hiring across all sectors.
Data for February and March was revised up to show 16,000 more jobs created than previously reported.
Economists polled by Reuters had forecast NFPs rising by just 185,000 jobs last month.
Job growth is well above the roughly 100,000 needed per month to keep up with growth in the working-age population.
The 2nd month of strong job growth was further evidence that February’s 56,000 increase in jobs was an aberration. It effectively put to rest concerns about a recession and may have diminish expectations of an interest rate cut this year that had been fueled by a brief inversion of the Us Treasury yield curve in March.
Steadily rising wages have on balance been keeping workers in the labor force and drawing back those who dropped out. Average hourly earnings rose 6c, or 0.2% in April after rising by the same pace in March. That has the annual increase in wages at 3.2%.
The wage growth is seen sufficient to underpin economic growth. The economy grew at a 3.2% annualized rate in Q-1, driven by a surge in exports and inventories.
The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, fell to 62.8% in April from 63.0% in March. The participation rate hit 5-year highs at 63.2% in January. The low participation rate suggests some slack still remains in the labor market.
Employment at construction sites increased by 33,000 jobs in April, rising for a 2nd month running.
Manufacturing sector payrolls rebounded by 4,000 jobs after being unchanged in March.
Government payrolls increased by 27,000 in April driven by early hiring for the 2020 Census.
Making and Keeping America Great!
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