The unemployment rate in the U.S. fell to 3.9 percent in April after the economy added 164,000 jobs, representing the lowest point in almost two decades, according to the government’s employment report issued Friday.
This is a clear sign that the job market has become more competitive, the Labor Department said. Average hourly earnings also rose by 4 percent, up 2.6 percent over the past year, maintaining a slow pace of growth, The Washington Post writes.
Since October, the unemployment rate remained at 4.1 percent without changing. The streak defied the expectations of economists, who said the nation’s prolonged hiring blitz would drive the figure down. However, in April the number of unemployed women looking for a job fell to 3.5 percent, down 0.3 percent since March. Other worker groups — men, whites, blacks, Hispanics — showed no significant change in this area.
Fewer people are also facing layoffs, government data indicates. Initial claims for state unemployment benefits hit 211,000 during the last week of April, the lowest level since March 1973.
President Donald Trump responded to the report in a tweet, saying, “Because Jobs in the U.S. are doing so well, Americans receiving unemployment aid is the lowest since 1973. Great!”
Economists say the tightening labor market should accelerate wage growth.
“The longer the economy burns hot, the more workers are in the driver’s seat negotiating with companies,” said Andrew Chamberlain, chief economist at Glassdoor, a jobs site.
The main reason is that baby boomers are beginning to retire and younger generations who are less likely to have attended vocational school do not replace them, the Post adds. As a result, many employers are deciding to increase bonuses.
“We are in a demographically induced tight labor market,” said Joe Brusuelas, chief economist at RSM.
Some companies say the lack of workers thwarts their growth, but the U.S. has experienced a steady hiring streak this year, adding an average of 202,000 new positions each month.