While the unemployment rate continues to hold steady from last October at 5%, payrolls only increased by 160,000 in April versus the 197,000 economists were expecting. Additionally, the government said that the job gains experienced in March were actually lower than originally announced—reduced to 208,000 jobs (7,000 fewer jobs than previously reported).
The labor-force participation rate, which measures the number of people either employed or actively seeking employment, decreased to 62.8 percent, down from 63% last month. The number of long-term unemployed (those jobless for 27 weeks or more) also declined, decreasing by 150,000 and accounting for 25.7 percent of the overall unemployed.
Job gains continued to grow in professional and business services (+65,000), technical consulting services (+21,000), computer systems design and related services (+7,000), health care (+44,000), and financial activities (+20,000). Construction companies and retailers both cut back on hiring as the energy and mining sector shed another 7,000 jobs in April.
Although workers remain frustrated that their pay isn’t going up very fast, April’s job report did allude to some progress as the US economy experienced a decent spike in wages, having grown 2.5% annually. While that’s still below the 3% to 3.5% threshold that’s typical of a healthy U.S. economy, 2.5% is undoubtedly a move in the right direction considering many states, including California, Colorado, Michigan and Massachusetts, increased their minimum wages at the start of 2016.
With monthly employment growth averaging 192,000 in the first four months of the year, a slowdown from last year’s monthly averages, concerns are rising that the U.S. economy is losing momentum. However, experts are still hopeful there will be a Spring jump in employment as Federal Reserve officials project the unemployment rate will fall to 4.7% by the end of this year.
Some believe the slowdown in hiring in April means there’s almost no chance the Federal Reserve will raise interest rates at its next meeting in June or until the 2016 presidential election concludes. On the other hand, others are saying that the Federal Reserve could raise rates as early as July. As we’ve seen over the last 16 months, times are ever changing… anything can happen.