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U.S. Unemployment Rate Hits 7-Year Low

Unemployment has fallen to a seven-year low in the United States, following 223,000 jobs being added to the economy in April.

The lowest unemployment rate is now occurring since May 2008 with the rate falling one-tenth of a percent to 5.4 percent, The Hill reports.

“The additional hiring helped push the unemployment rate down to a seven-year low of 5.4%, edging closer to the 5.0-5.2% range which is widely seen as indicative of full employment,” said Chris Williamson, chief economist at Markit.

The fall in unemployment comes after the Bureau of Labor Statistics misreported February and March numbers. February actually had more new jobs added than originally reported, with 266,000, while March was lower than initially thought by 41,000 jobs, for a total of 85,000.

March represented the smallest increase in jobs since June 2012.

The final numbers for new jobs in April were lower by just 2,000; it was expected 225,000 new jobs would be created, The Guardian reports.

Construction saw a large increase in April with 45,000 jobs; the industry has added 280,000 jobs over the past year.

Wages rose 3 cents last month, a 2.2 percent increase over the past year.

Even with the dip in March, the average job growth pace has been a steay 190,000 jobs over the past three months.

With the unemployment rate close to the full employment benchmark of 5 percent, the Federal Reserve Bank may decide to raise interest rates. The next meeting of bank officials is scheduled for mid-June.

Even with the strong numbers for employment, economists do not foresee a rate hike happening.

“In the end, not the strong labour market release that could have put a June rate hike back on the table,” Rob Carnell, chief international economist at ING, said. “And even with a really good payrolls figure for May, the June rate hike option now looks dead and buried.”

“We may see a further acceleration in employment growth going into the summer, but this isn’t the sort of unequivocal rebound that would give the Fed the confidence to begin tightening monetary policy before independence day,” economist Paul Ashworth at Capital Economics said.

Sources: The Guardian, The Hill

Photo Source: KTRS, Andreas Klinke Johannsen/Flickr


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