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US hiring topped forecasts in April as the jobless rate dipped to a fresh 49-year low and wage gains were slightly cooler than projected, suggesting the still-healthy labour market can continue to support growth without fueling inflation.
Payrolls climbed by 263 000 after a downwardly revised 189 000 advance the prior month, according to a Labor Department report Friday that exceeded all estimates in a Bloomberg’s survey. The jobless rate unexpectedly fell to 3.6% while average hourly earnings growth was unchanged at 3.2%, below projections.
The solid reading follows calls from President Donald Trump and others for a Federal Reserve interest-rate cut to support the expansion. Policy makers reiterated their patient stance this week as Chairperson Jerome Powell cited “very strong job creation’’ while also noting weaker inflation.
The surprising robustness follows months of broad labour market strength. While the expansion is poised to become the nation’s longest on record at midyear, economists expect a deceleration this year even after a strong first quarter.
Revisions for February and March added 16 000 more jobs than previously reported, while the three-month average fell to 169 000.
Friday's data follow a Federal Open Market Committee statement Wednesday saying “the labour market remains strong.” Officials in March forecast a 3.7% unemployment rate at year end.
Payroll gains uneven
The payroll gains were somewhat uneven, with construction, health care, and professional and business services posting gains while retail employment fell by 12 000 for a third- straight decline.
Construction payrolls climbed by 33 000, the most since January, as manufacturing employment rose by 4 000. Factory employment was unchanged in the prior month after a previously reported drop.
Average hourly earnings rose 0.2% from the prior month after a revised 0.2% rise in the prior period. Wages for production and nonsupervisory workers accelerated to a 3.4% annual pace, signaling gains for lower-paid employees.
While the historically tight labor market has pushed companies to raise pay, inflation appears largely subdued, as the fatter paychecks don’t show any sign of fueling faster price gains.
At the same time, the average workweek got slightly shorter, boosting average hourly pay. The average for all private employees decreased to 34.4 hours, from 34.5 hours.
