Gains in U.S. Payrolls Slow Down During April
The labor market in the U.S. decelerated during April, a new sign that employers might be becoming cautious after the slowdown in the economy earlier this year.
During April nonfarm payrolls increased 160,000, said the Labor Department on Friday. It was the country’s weakest gain in seven months. The rate of unemployment remained the same at 5%.
Economists who were surveyed forecasted that payrolls would increase by over 205,000 for April and that the rate of joblessness would remain steady at 5%.
Revisions also showed that 19,000 fewer jobs were added by employers between February and March than had been estimated previously. Thus far, in 2016, job gains are averaging just over 192,000 per month.
That is slower than the jobs added per month of 229,000 on average during 2015. The job creation pace recently peaked during 2014, the best year for growth of employment since 1999. Steady job gains since were consistent with a labor market that remained healthy.
It was in contrast to the sluggish growth of the economy that decelerated even more early in 2016.
While hiring last month was less, there was an improvement in wage gains. The average earnings per hour of workers in the private sector rose 8 cents in April equal to 0.3% to now sit at $25.52.
From one year earlier, there has been an increase in wages of 2.5%, a gain that was firmer than during March. The most recent gain annually is slightly stronger that the 2% increase annually recorded since the U.S. economy started steadily increasing jobs during 2010.
The workweek average for workers in the private sector was up by 0.1 hours to just over 34.5 hours during March.
While the rate of unemployment remained steady, the size of the overall labor force contracted, partially due to reversing increases in prior months.
The share of participating Americans in the labor force dropped to just 62.7% during April from March’s 63%.
That measurement hit its bottoming out in September at 62.3%, the lowest since 1977. However, it has increased recently. The share of people in the U.S. with jobs in April was 59.7%, which was a small decrease from the prior month.
Nevertheless, the unemployment rate for April is slightly above the lowest level in 7 years.
With the rate of joblessness low, the modest softening in gains of employees likely will not concern officials at the Federal Reserve.
Last year Chair Janet Yellen said adding 100,000 new jobs per month was enough to absorb any new entrants to the U.S. labor force.