United States: Payrolls growth jumps back up, unemployment falls to 5.4% in April
May 8, 2015
Non-farm payrolls grew by 223,000 in April, which was well above March’s downward revised increase of 85,000 (previously reported: +126,000). March’s reading marked the lowest increase in almost three years and interrupted a yearlong streak of monthly gains above 200,000. April’s result was roughly in line with market expectations of a 220,000 increase. The strong result suggests that the notably weak GDP growth tallied in Q1 was a temporary slowdown.
The private sector was almost entirely responsible for new hiring, having added 213,000 jobs in March. The largest gains were registered in professional business services, construction, as well as education and healthcare. The public sector added 10,000 jobs. The U.S. economy now has 3.0 million more people employed than at the pre-crisis January 2008 peak.
The unemployment rate—derived from a different survey—inched down from 5.5% in March to 5.4% in April, which marks the best result since May 2008. The print was in line with market expectations. The drop to 5.4% pushes the unemployment rate into the Fed’s target zone of 5.2%-5-5%. However, the labor market may not be as strong as April’s headline numbers suggest. Labor participation rates still remain notably low and wages have increase minimally over the past months.
Author: Carl Kelly, Economist