Sunday, 19 August, 2018

What 3.9% Unemployment Tells Us About the Economy

Unemployment rate falls in April Unemployment Drops To 3.9%, Lowest In 17 Years
Andy Castillo | 06 May, 2018, 00:06

But even if you look at the last three years, the relationship is still a lot weaker than it used to be - the unemployment rate accounts for only about 30 percent of wage growth over that time. February's increase was trimmed to 324,000 from 326,000.

The report indicates another month of solid job gains for an economy that has been expanding for nearly nine years.

At first glance, it would appear that the labor market is tightening and giving workers a little more leverage with their employers.

Unemployment - which had stood at 4.1 percent since October 2017 - fell to 3.9 percent, according to Friday's report from the Bureau of Labor Statistics.

But for much of the expansion, many people have felt left behind.

The unemployment rate fell to 3.9 percent, the lowest since December 2000. However, hiring in April fell short of the projected 192,000 jobs added, according to economists surveyed by Reuters.

The dollar.DXY shrugged off the employment data, rising to its highest level this year against a basket of currencies.

Macron's visit a timely opportunity to act on Iran's nuclear program
While not naming China, Macron said France will increase its influence in the region to ensure "rules-based development". The oak comes from the site where the Battle of Belleau Wood raged in northern France in June 1918.

While average hourly earnings have suggested only a gradual increase in wage inflation, other measures have been more robust.

Unemployment in the USA hit a post Great Recession landmark, according to figures released Friday, while a separate report showed increased factory orders but declining capital investment for new factory equipment. The number of discouraged workers was 408,000, a decrease of 47,000 from a year earlier. The average workweek for production and nonsupervisory employees on private nonfarm payrolls increased by 0.1 hour to 33.8 hours. A few companies are spreading the wealth: Walmart has increased its hourly pay rate, and American Airlines is paying out $1,000 bonuses.

Economists interpreted symmetric to mean policymakers would not be too concerned with inflation overshooting the target. Expectations are that the central bankers will hike interest rates three more times this year.

The drop in the unemployment rate came amid another decline in the labour force participation rate to 62.8%, the lowest since January.

Wage growth advanced by a modest 0.15%, or $0.04, in April compared with March. That's the lowest rate on record, and significant because black workers' unemployment is typically double that of whites. The economy added 164,000 jobs, which was the second consecutive sub-200,000 job month in a row. Hospitals added 8,000 jobs last month, down from 9,900 jobs in March. Over the past 12 months, the industry has added 518,000 jobs.

Payrolls for temporary help, seen as a harbinger of future permanent hiring, rose by 10,300 after falling by 2,100 in March. They also expected to see the unemployment level drop slightly.

The 17-year unemployment low is still steadily at 4.1 percent.

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