Thursday, 24 May, 2018

USA job growth rebounds modestly; unemployment rate falls

Unemployment drops, but wage growth remains sluggish US Unemployment Drops To 3.9 Percent; Jobs Report Shows Gain Of 164000 Jobs
Jodi Jackson | 06 May, 2018, 00:06

"Today's jobs report reinforces a number of themes we have emphasized: (1) U.S. growth is set to accelerate in Q2, even as the rest of the world may be slowing, (2) the unemployment rate is likely to drop faster than Fed expectations, and (3) despite strong economic growth and a low unemployment rate, inflationary pressure remains muted", Citibank said.

The U.S. unemployment rate has dropped two-tenths of a point to 3.9%.

Samra added: "There are plenty of other tailwinds which can also help to elongate the United States bull market, such as recent tax cuts, solid corporate earnings, strong year-on-year growth for the S&P 500, still relatively low interest rates, and inflation that is tame enough-albeit rising-to keep the Federal Reserve from having to tap the brakes more strongly".

"Because Jobs in the US are doing so well, Americans receiving unemployment aid is the lowest since 1973". Among "prime-age" workers between the ages of 25 and 54, she said, there were more people leaving the labor force than finding jobs. Year-over-year, wages were up 67 cents, or 2.6 percent.

But average hourly earnings could be understating wage inflation. Furthermore, this year's gains have remained robust, with a remarkable average of 200,000 jobs added per month, even stronger than last year's average of 182,000.

Wages grew 2.6 percent year-over-year. "Getting that unemployment rate down near four percent and the number of jobs that have been added to the economy each month have been really great indicators for the labor market". The broader measure of labor underutilization U-6 declined to 7.8 percent, the lowest rate since 2001.

In April, the number of private sector jobs rose by 168,000, while the number of government jobs slid by 4,000. Some economists say that's because businesses are choosing to hire less educated or otherwise less "desirable" workers rather than offer more pay.

Americans need rising wages to help offset higher prices and drive consumer spending, the backbone of the economy.

April is the 91st consecutive month of job gains which is, by far, the longest streak of increases ever recorded.

"I hear my clients saying the tax bill gave them more confidence in the pro-business economy", said Tom Gimbel, CEO of search firm LaSalle Network.

The Trump administration woke up to good news on Friday morning with the unemployment rate dropping to 3.9 percent, the lowest its been since 2000. Eight years ago, the jobless rate was 10 percent.

Part of the April drop in the rate was due to more people leaving the workforce.

"JUST OUT: 3.9% Unemployment".

The Federal Reserve is on track to raise interest rates in June for the second time this year and potentially one more time after that in 2018.

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