On Friday, the Labor Department reported that 211,000 jobs were added to the U.S. economy in April, while the unemployment rate fell to 4.4 percent. The report beat analyst expectations—economists surveyed by The Wall Street Journal were expecting only 188,000 jobs—which was a welcome relief after a miss in March. Here are the three most important takeaways.
- The U.S. labor market is near full employment.
The unemployment rate has been at or under 5 percent for 18 months running, and this month’s reading is a 10-year low. The nagging question for economists in the past year has been whether the economy is at full employment after months of steady growth. The dispute is in the details: The topline numbers have been stellar, with a healthy number of jobs being added monthly and the unemployment rate falling to record lows. Labor-force participation has also stopped declining, and is holding steady at 62.9 percent.
But where economists would like to see more improvement is in wages. In April, average hourly earnings were up to $26.19—which brings the overall wage growth in the past 12 months to 2.5 percent. That’s not bad, but the growth rate for wages hasn’t been accelerating, which gives some analysts pause. A strengthening labor market should theoretically produce better pay for many American workers, and allow for those who dropped out of the workforce during the recession to return to the labor market due to the increase in jobs and pay.
- April’s report is a bounce back from March.