US jobless rate falls to 10-year low; 211,000 jobs added

Workers help re-pave a road in South Pasadena, California.
Workers help re-pave a road in South Pasadena, California.PHOTO: AFP

Data signals labour market still healthy; increases in consumer spending expected

WASHINGTON • Payroll gains in the United States rebounded last month by more than what was forecast, and the jobless rate unexpectedly fell to 4.4 per cent, signalling that the labour market remains healthy and should support continued increases in consumer spending.

The 211,000 increase followed a 79,000 advance in March that was lower than previously estimated, a US Labour Department report showed yesterday.

While the unemployment rate is now the lowest since May 2007, wages were a soft spot in the report, climbing 2.5 per cent from a year earlier.

The brighter figures follow a weaker-than-expected reading in March, when payrolls were partly depressed by a snowstorm that slammed the country's north-east during the survey week.

Strengthening business sentiment might be translating into hiring, and the data should keep Federal Reserve policymakers on track to raise interest rates in the coming months after officials declared the first-quarter slowdown to be temporary.

"The labour market has progressively gotten tighter and tighter," Mr Jim O'Sullivan, chief US economist at High Frequency Economics in New York, said before the report. The job growth trend is "pretty strong, relative to the demographics - more than enough to keep unemployment down over time", he added.

Employment gains were broad- based though concentrated in services.

Leisure and hospitality registered a 55,000 increase, education and health services was up 41,000, and financial activities rose by 19,000. Retail rebounded with a 6,300 increase following a revised loss of 27,400.

Manufacturing and construction jobs rose, but at a weaker pace than at the start of this year. Factories added 6,000 jobs after a 13,000 gain, while construction workers rose by 5,000, following a 1,000 gain in March.

Total private employment, which excludes government agencies, climbed 194,000, following a 77,000 advance in March. Government payrolls rose by 17,000, including a 6,000 decline at federal agencies and 23,000 increase at state and local governments.

Wage growth accelerated on a monthly basis to 0.3 per cent from a revised 0.1 per cent gain in March. In the absence of faster wage growth, consumers have retained a healthy outlook as they have largely put aside savings from income gains, including stronger stock and housing prices.

Weaker household purchases in the first quarter reflected a slowdown in car sales, which are easing to a more sustainable rate, and smaller home-heating bills owing to unusually warm weather.

The underemployment rate, a measure that includes those working part-time who would take a full-time job if it were available, dropped to 8.6 per cent, the lowest since November 2007, just before the last recession began. In March, it was 8.9 per cent.

The number of discouraged workers fell by 5,000 last month to 460,000, and was 363,000 the month the last recession started.

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A version of this article appeared in the print edition of The Straits Times on May 06, 2017, with the headline 'US jobless rate falls to 10-year low; 211,000 jobs added'. Print Edition | Subscribe