What 3.9% Unemployment Tells Us About the Economy

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The unemployment rate dropped to 3.9 percent in April, one of the lowest rates in recent history.

The number that really pops out from the latest data release on the USA labor market, however, is the unemployment rate. That was compared to a 3.6 White unemployment rate and 2.8 percent for Asians.

Sluggish wage growth and a slowdown in hiring threaten to undercut the Trump administration's argument that its $1.5 trillion income tax cut package, which came into effect in January and is highlighted by a sharp drop in the corporate income tax rate, would boost wages and hiring. Blue: absolute numbers; Red: As a percentage of the noninstitutional population 16 years and over.

The Bureau of Labor Statistics said that manufacturers added 24,000 workers in April, extending the 22,000 gain seen in March. Much of that drop is the product of Americans exiting the labor force instead of finding jobs. Its official title is U-6 and it includes individuals only marginally attached to the labor force, plus those who are engaged part-time but would prefer to be occupied full-time.

Despite reports of firms struggling to find skilled workers, average hourly earnings showed a deceleration, rising 0.1 percent from the prior month and 2.6 percent from a year earlier, both less than forecast.

Unemployment hasn't stayed below four percent for a sustained period since the 1960s.

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The memo also stated it was likely that authorities would investigate whether or not the vehicles contained defeat devices. According to the report, the charges were filed secretly in March and made public Thursday.

The gains reflect an economy that has been steadily expanding for nearly nine years, gradually putting more people to work after the country endured the worst financial meltdown since the Great Depression in the 1930s.

Nonfarm payrolls increased by 164,000 jobs last month, the Labor Department said on Friday.

While the USA may be technically at full employment, according to the definition, I won't be convinced until paychecks start increasing. But, while hundreds of thousands of jobs are being added each month, our wages are only inching up. Over the three months through April, job gains have averaged 208,000 per month. Manufacturing employment has risen by 245,000 over the year, with about three-fourths of the growth in durable goods industries.

Overall, healthcare has added 305,000 jobs over the year, according to the BLS. In April, employment rose in ambulatory health care services (+17,000) and hospitals (+8,000). The April jobs report did not show any pickup in inflationary pressures that have been worrying investors.

Though that may soon change as employers seek to keep their workers by giving them higher wages.