US job growth surges in April, beating expectations with 263,000 added
The U.S. economy added 263,000 jobs in April, soaring past Wall Street’s expectations for an increase of 185,000 jobs, while unemployment fell to the lowest rate since 1969.
The unemployment rate dropped to 3.6 percent, beating analysts' expectations of 3.8 percent. The labor force participation rate, meanwhile, was little changed at 62.8 percent, from 63 percent the month prior. Average hourly earnings – which investors were closely watching for signs of inflation – rose by 6 cents to $27.77. Over the year, average hourly earnings have increased by about 3.2 percent, slightly missing expectations of 3.3 percent.
A majority of the job creation was concentrated in the professional and business services, which added 76,000 jobs in April. Construction employment rose by 33,000 jobs, while employment in the health care sector expanded by 27,000 jobs. Financial activities job creation ticked up by about 12,000. Manufacturing, however, was little changed for the third month in a row: Only 4,000 jobs were created in this sector during April, and over the past 12 months, the industry added a measly 22,000 jobs per month.
The job creation in April marks the 119th month of straight gains. Over the past year, the economy has added an average monthly gain of 213,000 jobs.
"This is another loud and clear signal that the economy is in really good shape," said Mike Loewengart, the chief investment officer at E-Trade Financial. "We’re getting to a point where it’s hard to find something to be concerned about."
Still, the better-than-expected report likely provides new fodder to the Federal Reserve that its dovish policy stance is the best course of action to balance lingering headwinds, such as the global trade war and uncertainties surrounding Brexit, with otherwise strong economic data in the U.S.
Policymakers at the U.S. central bank signaled during their two-day meeting this week that they won't hike or cut interest rates in the near-term, remaining on the wait-and-see track from earlier this year. Most economists predicted that because the labor market is chugging along at a healthy and relatively steady pace, the Fed will be watching inflation to determine whether it needs to change the benchmark federal funds rate.
"The Fed is in a good spot right now," said Curt Long, the chief economist for the National Association of Federally-Insured Credit Unions.
The April jobs report also comes on the heels of the release on Wednesday of the ADP National Employment report, which revealed that U.S. private sector hiring last month grew by 275,000 jobs, surging past analyst expectations of 180,000.
In March, hiring rebounded from a measly month of job creation, with 189,000 jobs added by U.S. employers.