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U.S. Added 160,000 Jobs Last Month as Brisk Hiring Slowed U.S. Added 160,000 Jobs Last Month as Brisk Hiring Slowed
(about 7 hours later)
After racing ahead for many months, 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. After racing ahead for many months, 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 came 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 followed the best two-year stretch for the job market since the tech-fueled boom of the late 1990s.
The unemployment rate, which is tied to a separate survey of households, was unchanged at 5 percent.The unemployment rate, which is tied to a separate survey of households, was unchanged at 5 percent.
While a downshift, the healthy pace suggested that some of the other recent signals exaggerated the weakness in the economy Late last month, for example, the government reported that the economy barely expanded in the first quarter.
But most experts say the gains in the labor market in recent months are a more reliable sign, suggesting that the economy will continue to expand for the rest of 2016, with the pace of growth picking up modestly from the stagnant start to the year.
“It’s a soft report but it doesn’t portend a turn in the labor market,” said Michael Gapen, chief United States economist at Barclays. “I’d be more concerned if there were weakness across the board, but there wasn’t.”“It’s a soft report but it doesn’t portend a turn in the labor market,” said Michael Gapen, chief United States economist at Barclays. “I’d be more concerned if there were weakness across the board, but there wasn’t.”
Indeed, April’s slower but still steady pace of payroll growth could be a sign of things to come. With economists expecting the economy to grow at an annual rate of 1.5 to 2.5 percent for the balance of 2016, monthly job gains may slow from the 192,000 pace registered so far this year. Late last month, the government reported that the economy barely expanded in the first quarter. But most experts say the gains in the labor market in recent months are a more reliable sign, suggesting that the economy will continue to expand for the rest of 2016, and that the pace of growth will pick up modestly from the stagnant start to the year.
The latest jobs data is likely to leave the Federal Reserve waiting for signs of a pickup in activity before moving ahead with more interest-rate increases. Fed officials will see one more jobs report before their next meeting in June. April’s slower but still steady pace of payroll growth could be a sign of things to come. With economists expecting the economy to grow at an annual rate of 1.5 to 2.5 percent for the balance of 2016, monthly job gains may fall from the 192,000 pace registered so far this year.
William C. Dudley, president of the Federal Reserve Bank of New York, said in an interview on Friday that the latest government data demonstrates that the labor market continues to improve gradually, in line with the Fed’s expectations. The latest jobs data is likely to leave the Federal Reserve waiting for further signs of a pickup in activity before moving ahead with any interest rate increases. Fed officials will see one more jobs report before their next meeting in June.
William C. Dudley, president of the Federal Reserve Bank of New York, said in an interview on Friday that the latest government data demonstrated that the labor market continued to improve gradually, in line with the Fed’s expectations.
“It’s a touch softer, maybe, than what people were expecting, but I wouldn’t put a lot of weight on it in terms of how it would affect my economic outlook,” he said.“It’s a touch softer, maybe, than what people were expecting, but I wouldn’t put a lot of weight on it in terms of how it would affect my economic outlook,” he said.
Mr. Dudley added that it remained a “reasonable expectation” that the Fed would increase its benchmark interest rate two times this year.Mr. Dudley added that it remained a “reasonable expectation” that the Fed would increase its benchmark interest rate two times this year.
The Labor Department also revised downward its estimate of the number of jobs added in February and March by 19,000.The Labor Department also revised downward its estimate of the number of jobs added in February and March by 19,000.
Diane Swonk, an independent economist in Chicago, pointed to the strong gain of 67,000 jobs in the business and professional services category as additional evidence that the broader slowdown in hiring last month was not an ominous sign of trouble ahead.Diane Swonk, an independent economist in Chicago, pointed to the strong gain of 67,000 jobs in the business and professional services category as additional evidence that the broader slowdown in hiring last month was not an ominous sign of trouble ahead.
“The quality of the jobs improved but the quantity did not,” she said, adding that the health of this heavily white-collar sector explained why wage growth was also robust. “The quality of the jobs improved but the quantity did not,” she said, adding that the health of this heavily white-collar sector helped explain why wage growth was also robust.
The 0.3 percentage point rise in average hourly earnings was the most positive sign of the economy’s trajectory in Friday’s report.The 0.3 percentage point rise in average hourly earnings was the most positive sign of the economy’s trajectory in Friday’s report.
Until a nascent quickening 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. Until 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. The change in earnings in April suggested that the upward tick in wages was not 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 firming, even if the month-to-month pattern had been uneven. In addition to a tighter labor market, which has prompted some major employers to raise their wage floor, dozens of states and cities either have already carried out or are considering increases in the minimum wage. Combined, those forces are helping push up pay at the low end of the job market.
With dozens of states and cities either having already carried out or considering 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 the District of Columbia are set to enact raises on July 1. “The good news is that we are re-engaging people who’ve been on the sidelines,” Ms. Swonk added.
With the presidential race now moving from the primary phase into the general election campaign, April’s jobs report contained fodder for candidates in both parties. States including California, Colorado, Michigan and Massachusetts increased their minimum wages at the start of 2016. Maryland and the District of Columbia are set to enact raises on July 1.
Democrats can point to the rise in wages as evidence that conditions are improving, but the slowdown in hiring and a large drop in the number of Americans in the work force bolsters Republican claims that the economy remains lackluster. The proportion of Americans in the labor force dropped last month to 62.8 percent from 63 percent in March, partially reversing a rebound that began last fall after the participation rate hit lows last seen in the 1970s. At a news conference Friday at the White House, President Obama said he was pleased that the United States economy had added 160,000 jobs in April, though he cautioned that “the global economy, as many people here are aware, is not growing as fast as it should be.”
“Here in the United States, there are folks out there who are still hurting,” Mr. Obama said, “and so we’ve got to do everything we can to strengthen the good trends and to guard against some dangerous trends in the global economy.”
With the race to succeed President Obama now moving from the primary phase into the general election campaign, the April jobs report contained fodder for candidates in both parties.
Democrats can point to the rise in wages as evidence that conditions are improving, but the slowdown in hiring, particularly among manufacturing industries, and a large drop in the number of Americans in the work force may add to complaints among blue-collar workers that they are being left behind.
The proportion of Americans in the labor force dropped last month to 62.8 percent from 63 percent in March, partly reversing a rebound that began last fall after the participation rate hit lows last seen in the 1970s.
Like the unemployment rate, participation in the labor force is measured in the Labor Department’s household survey, which is separate from the survey of businesses that is used to calculate the change in payrolls.Like the unemployment rate, participation in the labor force is measured in the Labor Department’s household survey, which is separate from the survey of businesses that is used to calculate the change in payrolls.
Although the two tend to correlate over time, the household data is more volatile than the payroll survey, and April was no exception. It showed more than half a million people leaving the labor force.Although the two tend to correlate over time, the household data is more volatile than the payroll survey, and April was no exception. It showed more than half a million people leaving the labor force.
Underscoring the political stakes in each month’s jobs report as November’s election draws closer, the candidates’ crucial constituencies fared quite differently last month.
For college-educated workers, many of them supporters of Hillary Clinton and Senator Bernie Sanders on the Democratic side, the already low jobless rate declined even further to 2.4 percent. The unemployment rate for Americans with a high school diploma, who have contributed to the crowds supporting the G.O.P. standard-bearer Donald Trump, was unchanged at 5.4 percent.For college-educated workers, many of them supporters of Hillary Clinton and Senator Bernie Sanders on the Democratic side, the already low jobless rate declined even further to 2.4 percent. The unemployment rate for Americans with a high school diploma, who have contributed to the crowds supporting the G.O.P. standard-bearer Donald Trump, was unchanged at 5.4 percent.
The unemployment rate for workers without a high school diploma increased slightly to 7.5 percent in April, continuing a rise from 6.7 percent at the end of 2015.The unemployment rate for workers without a high school diploma increased slightly to 7.5 percent in April, continuing a rise from 6.7 percent at the end of 2015.
The payroll numbers and the unemployment rate tend to dominate the headlines, but the Federal Reserve also pays close attention to the participation rate.The payroll numbers and the unemployment rate tend to dominate the headlines, but the Federal Reserve also pays close attention to the participation rate.
Economists predicted that April’s softness might persuade Janet L. Yellen, the Fed chairwoman, and her colleagues to remain hesitant about future interest rate increases until later this year. While Mr. Dudley, the New York Fed president, left open the possibility of higher interest rates in June, economists predicted that April’s softness might persuade Janet L. Yellen, the Fed chairwoman, and her colleagues to remain cautious about future rate increases.
“The Fed wants to see evidence that the economy is accelerating, and this doesn’t show that,” Mr. Gapen said. “So it’s likely to lead the Fed to prefer to be cautious.”
After the report, Barclays told clients in a note that the April data put a rate increase in June “off the table” and the that bank now expected only one interest rate increase by the Fed this year.After the report, Barclays told clients in a note that the April data put a rate increase in June “off the table” and the that bank now expected only one interest rate increase by the Fed this year.
Some notable pockets of weakness remain in the nation’s economy, especially in regions dominated by manufacturing and the energy industry. Some notable pockets of weakness remain in the nation’s economy.
In the first three months of 2016, factories shed 47,000 jobs, hurt in part by a stronger dollar and weaker overseas demand. Manufacturing employment rose by 4,000 in April. In the first three months of 2016, factories shed 47,000 jobs, hurt in part by a stronger dollar and weaker overseas demand. Manufacturing 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.
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 industry lost 170,000 jobs. In April, miners and loggers cut another 8,000 jobs.Between January 2015 and March 2016, the mining and logging industry lost 170,000 jobs. In April, miners and loggers cut another 8,000 jobs.
Over all, the muted tone of April’s report was not because of a big drop in any particular sector, although public sector employment fell by 11,000. Instead, pacesetters with big gains in previous months, like retailers, hit the brakes on new hiring. Public sector employment unexpectedly fell by 11,000. And pacesetters with big gains in previous months, like retailers, hit the brakes on new hiring.
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. When approximately 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.
Before the report, some economists predicted that the strike could have a modest impact on the numbers. Mr. Gapen said he did not think that was the case, because the telecommunications industry did not register a big drop in employment. Before the report, some economists predicted that the strike could have a modest impact on the numbers. Mr. Gapen, the Barclays economist, said he did not think that was the case, because the telecommunications industry did not register a big drop in employment.
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 it plans to add about 100 workers a quarter for the rest of 2016, said Iman Jalali, the company’s chief of staff. In hot fields like health care, technology and professional services, employers are scrambling to find new employees. In Chicago, ContextMedia, which provides tablets and digital wallboards for doctors’ offices, brought 25 new employees aboard in April. The company 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 doctors’ offices, supplying the devices, software and content for patients to obtain 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.
“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.”