Published: Sun, May 06, 2018
Markets | By Otis Pena

United States unemployment rate at 3.9 percent, the lowest level since 2000

United States unemployment rate at 3.9 percent, the lowest level since 2000

Even though many anxious that interest rates would rise following two weeks of record low unemployment, the US central bank left rates unchanged.

In the past three months the U.S. has added an average of roughly 208,000 jobs.

- "The main surprise was on the wages side, which continue to show little in the way of acceleration despite how low the jobless rate is". Manufacturing added 24,000, the seventh straight month at 20,000 or more.

"There's anecdotal evidence where we see employers who in areas with labor shortages are turning to groups that they wouldn't usually have turned to", said Catherine Barrera, chief economist at ZipRecruiter.

But Panday expects wages to pick up as the labor market tightens further, putting pressure on businesses to pay more to keep their workers and entice new ones.

After eight years of slow economic growth, America's economy has grown by 2.9 percent over the last four quarters, on its way to meeting President Trump's goal of 3 percent economic growth. However, hiring in April fell short of the projected 192,000 jobs added, according to economists surveyed by Reuters.

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The number that really pops out from the latest data release on the USA labor market, however, is the unemployment rate. Average hourly earnings rose 0.1 percent last month after a 0.2 percent gain in March. The broader measure of labor underutilization U-6 declined to 7.8 percent, the lowest rate since 2001.

Low unemployment also means higher wages as the employers are under less economic pressure and it means they can hike wages sharply to retain employees. Many economists consider a sub-4 percent unemployment rate unsustainable over the long term.

The latter were still seven years out from getting into PCs, but the former were averaging 49.4 million PC purchases a year.

The usual headline unemployment rate (3.9% in April) is officially labeled U-3. I guess that's why they call it the headline unemployment rate. There was a modest gain in leisure and hospitality employment while wholesale traders laid off workers. The health care and social assistance sector added 29,300 jobs and the construction industry 17,000. The jobs pick-up in residential construction has taken its level only about halfway to where it was prior to the recession.

Critics say it's "the wrong way to get to 3.9 percent".

But it could force the Federal Reserve to raise interest rates more quickly than planned, a concern on Wall Street in recent months. The "all jobs" year-over-year percentage change is now +1.6%, with services at +1.7% and manufacturing, +2.0%.

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