United States economic growth is expected to endure despite fears of a slowdown earlier this year with hiring accelerated and pay rose at a solid pace in April this year. Already, employers added 263,000 jobs, setting the stage for healthy The unemployment rate has dropped to a five-decade low of 3.6 per cent from 3.8
United States economic growth is expected to endure despite fears of a slowdown earlier this year with hiring accelerated and pay rose at a solid pace in April this year.
Already, employers added 263,000 jobs, setting the stage for healthy
The unemployment rate has dropped to a five-decade low of 3.6 per cent from 3.8 per cent.
Though that drop partly reflected an increase in the number of Americans who stopped looking for work. Average hourly pay rose 3.2 per cent from 12 months earlier, matching March’s year-over-year increase.
Friday’s jobs report from the government showed that economic growth remains brisk enough to encourage strong hiring nearly a decade into the economy’s recovery from the Great Recession.
The economic expansion, which has fueled 103 straight months of hiring, is set to become the longest in history in July.
“All of the recession talk earlier in the spring was much ado about nothing,” said Gus Faucher, chief economist at PNC.
Trump administration officials insisted that the job market’s gains were a result of the president’s tax cuts and deregulatory policies.
“We have entered a very strong and durable prosperity cycle,” said Larry Kudlow, director of the White House’s National Economic Council.
President Donald Trump has also pressed the Federal Reserve to cut short-term interest rates because inflation remains low.
But most economists said the healthy jobs picture, against the backdrop of low inflation, would reinforce the Fed’s current wait-and-see approach.
The Fed raised rates four times last year but has signaled that it doesn’t foresee any rate increases this year.
Investors welcomed the April jobs data by sending stock prices broadly higher. The Dow Jones Industrial Average closed up 197 points, or 0.75 per cent.
Jason Guggisberg, vice President of Adecco USA, a staffing firm that finds temporary and permanent hires for business clients.
He said companies are doing much more to attract workers. They are offering more perks — like free lunches or weekly happy hours — and allowing more flexible work schedules.
The brightening economic picture represents a sharp improvement from the start of the year.
At the time, the government was enduring a partial shutdown, the stock market had plunged, trade tensions between the United States and China were flaring and the Fed had just raised short-term rates in December.
Analysts worried that the economy might barely expand in the first three months of the year and might even tip into recession in the ensuing months.
Yet, the outlook soon brightened. Chair Jerome Powell signaled that the Fed would put rate hikes on hold. Trade negotiations between the US and China made some progress.
The economic outlook in some other major economies improved. Share prices rebounded. And in the end, the government reported that the US economy grew at a 3.2 per cent annual rate in the January-March period — the strongest pace for a first quarter since 2015. That said, the growth was led mostly by factors that could prove temporary — a restocking of inventories in warehouses and on store shelves and a narrowing of the US trade deficit.
By contrast, consumer spending and business investment, which more closely reflect the economy’s underlying strength, were relatively weak.
But, American households have become more confident since the winter and are ramping up spending. Consumer spending surged in March by the most in nearly a decade.
A likely factor is that steady job growth and solid wage increases have enlarged Americans’ paychecks.
Businesses are also spending more freely. Orders to US factories for long-lasting capital goods jumped in March by the most in eight months. That suggested that companies were buying more computers, machinery and other equipment to keep up with growing customer demand.
Most of last month’s job growth occurred in services, which includes both higher-paying jobs in information technology and lower-paying temporary work. Manufacturers added just 4,000 jobs.
Construction firms gained 33,000, mostly on public infrastructure projects.
Professional and business services, which include IT networking jobs as well as accountants and engineers, led the gains with 76,000.
Education and health care added 62,000 jobs, while a category that mostly includes restaurants and hotels gained 34,000.
Retailers are suffering from broader changes in the economy as more Americans are shopping online and stores close after decades of overexpansion. Also to blame is an aging US population that no longer needs to buy as much clothing and other goods.