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U.S. Added 160,000 Jobs Last Month as Brisk Hiring Slows U.S. Added 160,000 Jobs Last Month as Brisk Hiring Slowed
(35 minutes later)
After months of gravity-defying gains, the American jobs machine cooled slightly in April, as employers took their cue from other signs that economic growth was slowing by easing up on new hiring. After months of gravity-defying gains, the American jobs machine cooled in April, as employers took their cue from other signs that economic growth was slowing by easing up on new hiring.
The 160,000 increase in payrolls in April reported by the Labor Department on Friday comes after the best two-year stretch for the job market since the tech-fueled boom of the late 1990s. The 160,000 increase in payrolls in April reported by the Labor Department on Friday came after the best two-year stretch for the job market since the tech-fueled boom of the late 1990s.
The unemployment rate stayed at 5 percent. The unemployment rate, which is tied to a separate survey of households, stayed at 5 percent.
The consistent strength in hiring contrasts with other economic signals that have been decidedly mixed recently. Late last month, for example, the government reported that the economy barely expanded in the first quarter. While a downshift, the still-healthy pace of hiring contrasts with other economic signals that have been decidedly mixed recently. Late last month, for example, the government reported that the economy barely expanded in the first quarter.
But most experts say the steady gains in the labor market in recent months are a sign that the economy should continue to expand at a decent, if hardly spectacular, pace for the rest of 2016. But most experts say the steady gains in the labor market in recent months are a more reliable sign, suggesting that the economy should continue to expand for the rest of 2016, with the pace picking up modestly from the stagnant opening period.
A hopeful sign of the economy’s trajectory in Friday’s report was the 0.3 percentage point rise in average hourly earnings. “This isn’t a sign of real weakness,” Diane Swonk, an independent economist in Chicago, said of Friday’s report. “The quality of the jobs improved but the quantity did not,” she added, pointing to a strong gain of 67,000 jobs in the business and professional services category.
Until a nascent pickup recently, wages had been a sore point throughout the nearly seven-year-old recovery, barely rising despite the big drop in the unemployment rate. Mostly white-collar, the health of this sector explains why wage growth was also robust.
The change in earnings in April suggests that the upward tick in wages wasn’t a fluke. Wall Street had been expecting a 0.3 percentage point gain, which would translate to a 2.4 percent increase over the last year. The 0.3 percentage point rise in average hourly earnings was the most positive sign of the economy’s trajectory in Friday’s report.
In an interview before the release of the data Friday, Diane Swonk, an independent economist, said there were indications that wages were shoring up, even if the month-to-month pattern had been uneven. Until a nascent pickup recently, wages had been a sore point throughout the nearly seven-year-old recovery, barely rising in real terms despite the big drop in the unemployment rate.
The change in earnings in April, which was in line with Wall Street’s expectations, suggested that the upward tick in wages wasn’t a fluke. Over the last 12 months, wages are up 2.5 percent, well ahead of the pace of inflation.
Ms. Swonk said there were indications that wages were shoring up, even if the month-to-month pattern had been uneven.
With dozens of states and cities having either already implemented or considering future increases in the minimum wage, she explained, salaries at the low end of the job market are finally inching up.With dozens of states and cities having either already implemented or considering future increases in the minimum wage, she explained, salaries at the low end of the job market are finally inching up.
“We’ve hit a tipping point,” Ms. Swonk said. “It’s showing up in low-wage jobs, for waiters and waitresses, in retail and in leisure and hospitality.”“We’ve hit a tipping point,” Ms. Swonk said. “It’s showing up in low-wage jobs, for waiters and waitresses, in retail and in leisure and hospitality.”
States including California, Colorado, Michigan and Massachusetts increased their minimum wages at the start of 2016, while Maryland and Washington, D.C., are set to enact raises on July 1. States including California, Colorado, Michigan and Massachusetts increased their minimum wages at the start of 2016, while Maryland and the District of Columbia are set to enact raises on July 1.
Whether a result of legally mandated increases at the bottom or because of raises doled out by employers eager to retain more skilled workers in a healthier economy, better-paying and more plentiful jobs also seem to be luring workers back into the job market. Whether a result of legally mandated increases at the bottom or because of raises doled out by employers looking to retain more skilled workers in a healthier economy, better-paying and more plentiful jobs has been luring workers back into the job market.
But the proportion of Americans in the labor force dropped last month to 62.8 percent in April from 63 percent in March, reversing gains in recent months.
When roughly 40,000 Verizon workers went on strike last month, it was right in the middle of the week that government number crunchers analyze to gauge the strength of the job market. That may have had a modest impact on the numbers reported by the Labor Department.
“The good news is that we are re-engaging people who’ve been on the sidelines,” Ms. Swonk said. “The question is how far we can go.”“The good news is that we are re-engaging people who’ve been on the sidelines,” Ms. Swonk said. “The question is how far we can go.”
That question is also being pondered by Janet L. Yellen, the chairwoman of the Federal Reserve. Though the central bank kept rates steady when policy makers met last month, some economists argue they could move after their June meeting. That question is also being pondered by Janet L. Yellen, the chairwoman of the Federal Reserve. Though the central bank kept rates steady when policy makers met last month, some economists argue they could move at their June meeting.
However, with inflation still very subdued and more dovish officials worried that another rate increase could choke off growth, other experts argue that any tightening in monetary policy will not happen until later in the year. But with inflation still very subdued and more dovish officials worried that another rate increase could choke off growth, other experts argue that any tightening in monetary policy will not happen until later in the year.
Indeed, some notable pockets of weakness remain in the nation’s economy, especially in regions dominated by manufacturing and the energy industry.Indeed, some notable pockets of weakness remain in the nation’s economy, especially in regions dominated by manufacturing and the energy industry.
In the first three months of 2016, factories shed 47,000 jobs, hurt in part by a stronger dollar and weaker overseas demand. Manufacturing sector employment rose by 4,000 in April.
The oil patch is still reeling from the impact of sharply lower energy prices, despite a recent rebound. Other commodity-based industries like metals and mining are also hurting.
Between January 2015 and March 2016, the mining and logging sector lost 170,000 jobs. In April, miners and loggers cut another 8,000 jobs.
Over all, the muted tone of April’s report wasn’t because of a big drop in any particular industry, although public sector employment fell by 11,000. Instead, pacesetters with big gains in previous months like retailers hit the brakes on new hiring.
Despite contradictory macroeconomic signals, in hot fields like health care, technology and professional services, employers are scrambling to find new employees. In Chicago, ContextMedia brought 25 new employees aboard in April and plans to add about 100 workers a quarter for the rest of 2016, said Iman Jalali, the company’s chief of staff.Despite contradictory macroeconomic signals, in hot fields like health care, technology and professional services, employers are scrambling to find new employees. In Chicago, ContextMedia brought 25 new employees aboard in April and plans to add about 100 workers a quarter for the rest of 2016, said Iman Jalali, the company’s chief of staff.
ContextMedia provides tablets and digital wallboards for doctor’s offices, supplying the devices, software and content for patients to access information during their visits.ContextMedia provides tablets and digital wallboards for doctor’s offices, supplying the devices, software and content for patients to access information during their visits.
Salaries for software developers with several years’ experience can top $100,000 and it is a similarly competitive market for account managers, sales representatives and marketers. “The market is tighter,” Mr. Jalali said.Salaries for software developers with several years’ experience can top $100,000 and it is a similarly competitive market for account managers, sales representatives and marketers. “The market is tighter,” Mr. Jalali said.
“We’re trying to attract talent from across the country,” he added. “We’ve got some of the best people in Chicago but when you are growing so quickly you need to keep growing the pool.”“We’re trying to attract talent from across the country,” he added. “We’ve got some of the best people in Chicago but when you are growing so quickly you need to keep growing the pool.”