Bounce in retail sector hiring fuels addition of 211,000 jobs in April following a sharp drop in March and a lackluster private payroll report

This article is more than 3 years old

This article is more than 3 years old

Unemployment in the US fell to a 10-year low in April as 211,000 people joined the workforce and the jobs market bounced back from a winter chill that had led to speculation the recovery in the jobs market had stalled.

The hiring report was higher than expected and the jobs gains widespread, suggesting the US economy is preparing for a stronger recovery in spring after a slow start to the year.

President Donald Trump applauded the latest jobs figures on Twitter. “JOBS, JOBS, JOBS,” he tweeted.

“We have removed one job killing regulation after another, they are not pretty and they are going and believe me we are just getting started on regulation, they are gone,” Trump said in a video statement posted to Twitter.



Trump said his “massive tax cut” - outlined last week would also bring back jobs. “We want to turn our country into a jobs machine, a jobs magnet,” he said.



US stock markets barely moved on the news. Signs of strength in the US economy come against evidence of slowdown in China’s growth and a fall in oil prices, now at a five-month low.

Economists had forecast that the Department of Labor report would show hiring had picked up in April to between 180,000 and 200,000 after a sharp drop in March.



The US economy added just 98,000 jobs in March – about half what had been expected – as a late winter chill, a government hiring freeze and woes in the retail sector took their toll. That number was revised down to just 79,000 in the latest report.

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The latest government figures are likely to encourage the Federal Reserve to continue raising rates when it meets again in June. April’s hiring was boosted in part by a rebound in the troubled retail sector. Retailers added 6,700 jobs after losing close to 60,000 over the last two months amid a wave of closures. Leisure and hospitality added 55,000 jobs, professional and business services added 39,000 jobs and healthcare added 37,000.

“The market has sorely needed a shot of unambiguously positive ‘hard’ data. This morning’s employment report suggests the Fed will most certainly move in June,” Quincy Krosby, market strategist at Prudential Financial, said in a statement.

Gus Faucher, chief economist of PNC Financial Services, said: “With continued solid job growth, the US economic expansion will continue throughout 2017. Job and wage gains are supporting consumer spending, which will remain solid through the rest of the year. After pausing at their early May meeting, the Federal Open Market Committee (FOMC) will raise the federal funds rate again in mid-June as the economy is approaching full employment.”

The Fed left its benchmark interest rate unchanged after its latest meeting in Washington this week. But the FOMC’s members are in broad agreement that the US economy is now strong enough and rates should rise from their historic lows.

Donald Trump was elected on a wave of economic populism by an electorate that feels it has not benefitted from the recovery that followed the worst recession in living memory.

The president has promised wage growth and the return of manufacturing jobs to the US. The latest poll contained good and bad news for Trump. Jobs growth was once again concentrated in low-wage areas like hospitality; growth in manufacturing jobs barely moved, and the percentage of Americans who are in the workforce (known as the participation rate) dipped slightly on the previous month to 62.9%.

The US economy did add mining jobs again in April (9,000) and the sector, which voted heavily for Trump, has now added 44,000 jobs since October 2016. But mining jobs remain a small fraction of the overall jobs market, and even senior coal executives have warned Trump to “temper” expectations for a recovery in the increasingly heavily automated industry.

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The government report followed a lackluster report from ADP, the US’s largest private payroll processor. Private employers expanded their workforce by a seasonally adjusted 177,000 jobs last month – the slowest pace of hiring in four months.



Mark Zandi, chief economist of Moody’s Analytics, which helps compile the ADP report said: “Job growth slowed in April due to a pullback in construction and retail jobs. The softness in construction is continued payback from outsized growth during the mild winter. Brick-and-mortar retailers cut jobs in response to withering competition from online merchants.”

The jobs market added 533,000 new positions during the first three months of the year, in line with first quarters in 2016 and 2015.