Healthy economy posts lowest unemployment since 1969
May 3, 2019 15:15 ET
The economy added 263,000 jobs in April, pushing the jobless rate to its lowest level in 50 years, according to the latest report from the U.S. Bureau of Labor Statistics.
Unemployment fell to 3.6 percent, the lowest it has been since December 1969. The number of unemployed persons decreased by 387,000 month-over-month to 5.8 million.
Gains were fueled by a few sectors, including professional and business services, which added 76,000 jobs; health care, which added 27,000; construction, which added 33,000; and social assistance, which increased by 26,000.
“Once again, job growth was stronger than expected in April, and even with a weaker showing in February, there have been almost 170,000 jobs per month added over the past three months,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association. Fratantoni indicated that the strong wage growth outlined in the report — average hourly earnings rose by 6 cents in April to $27.77 — is a good sign for the housing sector.
“A healthy job market is the most important support for the housing market,” he said. “With mortgage rates still low, more households may consider buying a home, which is great news for the housing market and overall economy.”
Average hourly earnings have risen by 3.2 percent year over year. Odeta Kushi, deputy chief economist at First American Financial Corporation, said that there is potential for earnings to rise even more if the labor force participation rate intensifies; in April, it was flat year-over-year, but retreated by 0.2 of a percentage point to 62.8 percent month-over-month.
“Wage growth continued to grow this month, but for wage growth to continue its upward trend, the prime-age labor force participation must continue to rise,” Kushi said. “While the prime-age labor force participation rate continues to be below the 2007 level and the long-run trend, there is room for further growth to normal levels of 83 percent which, according to our analysis, could push wage growth to as high as 3.8 percent.
“[T]here is continued opportunity to draw more workers off the sidelines,” she added. “This level of participation suggests continued strong wage growth in the months ahead. That’s good news for potential homebuyers this spring, who will benefit from increased purchasing power and the added confidence to buy.”