What 3.9% Unemployment Tells Us About the Economy

What 3.9% Unemployment Tells Us About the Economy

What 3.9% Unemployment Tells Us About the Economy

The drop in the unemployment rate, which had held steady for six months, was hailed by President Donald Trump, who has taken credit for the robust health of U.S. economy.

The Labor Department outlined the gains in its latest jobs report Friday, which showed the number of unemployed Americans was 6.3 million.

Employment gains were broad-based across industries, with largest increases in business services, health care, education, construction and manufacturing.

Among the major worker groups, the unemployment rate for adult women decreased to 3.5 percent in April. "Why this tightness is not feeding into greater average hourly earnings growth remains a bit of a puzzle".

Economists polled by Reuters had forecast payrolls rising by 192,000 jobs in April and the unemployment rate falling to 4 per cent.

"This jobs report is truly a mixed bag", said Mark Hamrick, senior economic analyst at financial information website Bankrate.com. Over the past year, wages have come up by an average of 67 cents, or 2.6 percent.

But the Alaska job market is still in the doldrums, with unemployment the highest in the nation at 7.3 percent, even while almost 9,000 people left in the previous year.

Unemployment fell as low as 3.8% in April 2000, in the waning days of the technology boom.

"Wages were up 2.6 percent year over year, suggesting that inflation pressures are not building up in the economy", LendingTree Chief Economist Tendayi Kapfidze said of the results. Blue: absolute numbers; Red: As a percentage of the noninstitutional population 16 years and over.

Mining, a category that includes not just coal and metals but jobs in oil and gas fields, added 8,000 positions, partly because of a rise in oil prices.

President Trump celebrated the report. Americans are getting back to work as weekly unemployment insurance claims are hovering at their lowest levels in over 45 years, and more than 2.6 million Americans have stopped collecting food stamps since the start of the Trump Administration. But auto manufacturing, government and wholesale trade all shrank.

"Sooner or later, we're going to be running out of workers if the recovery continues, and that will put more upward pressure on wages", Alan Krueger, a Princeton University professor, said on Bloomberg Television. And the contraction in America's labor force will put limits on growth - and fiscal pressure on Social Security - unless we start implementing policies that make having children less hard for America's young people, and that allow more prime-age workers to enter the country through immigration.

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