USA employers pick up hiring, unemployment rate drops

Sean Reid
May 6, 2018

The Bureau of Labor Statistics (BLS) releases a monthly report which breaks down labor market trends like employment growth. Economists at the Federal Reserve reportedly show a forecast of 3.8 percent by the end of 2018, which is considered to be near "full employment".

Overall, the job gains occurred in professional and business services, manufacturing, health care, and mining categories. Unemployment has been at 4.1 percent for six consecutive months until this month when it edged down to 3.9 percent. "Manufacturing is still contributing an outsized share of private sector job growth, punching above its weight". Employment growth over the past couple of years has tended to be closer to 200,000. Revisions to prior reports added a total of 30,000 jobs to payrolls in the previous two months, according to the figures, resulting in a three-month average of 208,000.

President Donald Trump cheered the drop in the unemployment rate on Friday. Consumer confidence has improved over the past year. "Wages are clearly the one disappointing part of the report". Almost 400,000 people have left the labor force in the last two months, helping drive down the unemployment rate.

Catherine Barrera, chief economist of the online job site ZipRecruiter said the following. He was able to implement a massive overhaul of the tax code and reductions to many regulations and federal rules.

A demographic shift partly explains why employers are struggling to find talent. Average hourly earnings rose 0.1 percent last month after a 0.2 percent gain in March.

U.S. jobs growth slowed in April. In turn, higher rates could provoke a stock market selloff. But, while hundreds of thousands of jobs are being added each month, our wages are only inching up. "We are also seeing our clients acknowledge and respond to this development by becoming more proactive about keeping hold of their existing executive talent". The economy has added jobs every month for seven and a half years, the longest streak on record.

Low unemployment also means higher wages as the employers are under less economic pressure and it means they can hike wages sharply to retain employees.

"Wage growth picking up would suggest the labor market is tightening and that the Fed could have to move more aggressively", said Matthew Luzzetti, a senior economist at Deutsche Bank.

The civilian labor force participation rate fell 0.1 percentage point to 62.8%. A few companies are spreading the wealth: Walmart has increased its hourly pay rate, and American Airlines is paying out $1,000 bonuses.

"That has been pretty much flat since the beginning of 2014", Florida State University Prof.

"There's still hundreds of thousands of more people who will enter the workforce", he said.

Two Fed officials who are now voting members of the central bank's rate-setting committee showed little concern on Friday about price pressures heating up and said they were keeping an open mind on the total number of rate increases needed this year.

The unemployment rate fell to 3.9 percent, the lowest since December 2000. "But we're still not where we were in the year 2000". Instead, companies are bulking up their warehouses to compete with Amazon, slotting in tens of thousands of relatively low-paid pickers, packers and stockers over the past several years. "Those with the least qualifications are being lifted the last, but now that the labor market is that tight, it's happening". "I think we can get down to 3.5%".

"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", Krueger, a Princeton University professor, said on Bloomberg Television. It was never achieved at all by Obama. Eight years ago, the jobless rate was 10 percent. "They never reached three percent".

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