United States unemployment rate falls below 4%; not all is well, says report


USA hiring rebounded in April and the unemployment rate dropped below 4% for the first time since 2000, while wage gains cooled by more than forecast, a sign that the labor market still isn't tight enough to spur inflation. "But they're going to have incentive to work, because the greatest social program is a job", he said in his announcement speech in Trump Tower. Restaurants and hotels hired a net 18,000.

President Donald Trump quickly jumped on the report with an early Friday tweet, "Because Jobs in the USA are doing so well, Americans receiving unemployment aid is the lowest since 1973". The dip can be misleading, however.

Unemployment rate had held steady at 4.1 percent for six months before slipping to 3.9 per cent.

Labor force participation, which measures the share of the working-age population that is either employed or looking for work, actually ticked down for the second month in a row.

Hourly wages moved up by just 4 cents, to $26.84.

There were some bright spots.

"I don't think this report changes anything with the Fed", said Harm Bandholz, chief US economist at UniCredit Bank AG.

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Manufacturing added 24,000 jobs, up from a gain of 22,000 in March.

This compares to the 22,400 jobs the industry added the month prior. "It's basically the same report we've had for the last five years, which in the past has been viewed unambiguously as good news".

The increase in hiring fell short of the 188,000 forecast of economists polled by MarketWatch, but the shortfall was cushioned by upward revisions that show the US created more jobs in March than originally reported. But if you look at the average hourly earnings for production and nonsupervisory workers - the only numbers we have that go back to the last time unemployment was this low - you see a different story right now: stagnant wage growth no matter how low unemployment is. They're less likely to take jobs in construction and manufacturing.

"For housing, the rebound in construction employment suggests that building will continue its upward grind", Duncan said. It could increase the chance of faster interest rate hikes.

National Association of Realtors Chief Economist Lawrence Yun said the cumulative gains in jobs should have already translated into a surge in homebuying to begin the spring, but that hasn't happened.

"Businesses are facing a rising level of uncertainty, due in large part to the sharp escalation of trade tensions which in some cases are resulting in higher prices or reduced access to markets", said Mark Hamrick, senior economic analyst at Bankrate. Data has also shown that disabled workers are returning to the workforce, according to the New York Times.