Unemployment Falls to 3.9%, Lowest Since December 2000

The U.S. economy created 164,000 jobs in April and the unemployment rate fell to 3.9%, the lowest level since December 2000. While the number of jobs missed the 190,000 median forecast, jobs gains occurred in higher-paying sectors.

Professional and business services, manufacturing, health care, and mining led the way.

Worth noting, unemployment for African Americans (6.6%) and Hispanics (4.4% ) have fallen to brand new all-time lows. For Hispanics, the unemployment rate mirrors the all-time low previously hit in July 2017.

The number of unemployed persons, at 6.3 million, also edged down over the month.

The labor force participation rate (62.8%) and the employment-population ratio (60.3) were largely unchanged. The U-6 unemployment rate fell to 7.8%, the lowest level since July 2001. The alternative measure gauges total unemployment including marginally attached workers and those employment part-time for economic reasons.

That’s significant because it shows the U.S. economy has reverted back to a stronger full-time economy, rather than a part-time one. Under the Obama Administration, many of the jobs created were part-time and low-paying.

Employment in manufacturing increased by 24,000 in April. Most of the gain was in the durable goods component, with machinery adding 8,000 jobs and employment in fabricated metal products continuing to trend up (+4,000). Manufacturing employment has risen by 245,000 over the year, with about 75% of the growth in durable goods industries.

In April, employment in mining increased by 8,000, with most of the gain occurring in support activities for mining (+7,000). Since a recent low in October 2016, employment in mining has risen by 86,000.

The growth trends under the Trump Administration in manufacturing and mining mark a complete reversal from the net negative trend of job losses under the Obama Administration.

Wages also continued to trend up in April.

Average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents to $26.84. Over the year, average hourly earnings have increased by 67 cents, or 2.6%. Average hourly earnings of private-sector production and nonsupervisory employees increased by 5 cents to $22.51 in April.

Moody’s Analytics Chief Economist Mark Zandi said earlier in the week that the U.S. unemployment rate “will soon be in the threes” if job creation continues “at this pace.” His remarks came with the release of the latest stronger-than-anticipated ADP National Employment Report.

ADP said the U.S. private sector added 204,000 jobs from March to April, beating the 190,000 median forecast. The ADP National Employment report is derived from actual payroll data, while the Employment Situation is derived from data collected in a household survey.

Revisions

The Labor Department (DOL) via the Bureau of Labor Statistics (BLS) said the total number of jobs created in February was revised down slightly from +326,000 to +324,000. However, that was easily offset by the change for March, which was upwardly revised up from +103,000 to +135,000.

With these revisions, employment gains in February and March combined were 30,000 more than previously reported.