Unemployment Falls to 49-Year Low in April

Series with themes reflecting a certain billionaire politician who won the 2016 presidential election touting a very strong labor market. (Photo: AdobeStock)

Total nonfarm payrolls rose by a strong 263,000 in April, and the unemployment rate fell to 3.6%, both easily beating the consensus forecast. Wages continued to rise and unemployment for Hispanic unemployment fell to a new all-time low.

Prior Consensus Forecast Forecast Range Actual Nonfarm Payrolls – M/M ∆ 196,000 180,000 160,000 — 240,000 263,000 Unemployment Rate – ∆ 3.8% 3.8% 3.7% — 3.8% 3.6% Private Payrolls – M/M ∆ 182,000 178,000 160,000 — 216,000 236,000 Manufacturing Payrolls – M/M ∆ -6,000 10,000 -6,000 — 20,000 4,000 Participation Rate 63.0 % 63.0% 62.9 % — 63.0% 62.8% Average Hourly Earnings – M/M ∆ 0.1 % 0.2% 0.1% — 0.4% 0.2% Average Hourly Earnings – Y/Y ∆ 3.2 % 3.3% 3.2% — 3.5% 3.2% Avg Workweek – All Employees 34.5 hrs 34.5 hrs 34.5 hrs — 34.5 hrs 34.4 hrs

Construction added 33,000 jobs in April, fueled largely by nonresidential specialty trade contractors (+22,000). Heavy and civil engineering construction contributed 10,000. Construction has added 256,000 jobs over the past 12 months.

Manufacturing rose by 4,000 in April, a slight change for the third straight month. In the 12 months prior to February, the industry had added an average of 22,000 jobs per month.

“This report is very consistent with the March ADP report,” Tim Anderson, analyst at TJM Investments said. “It also break the string of what was 4 months of a ‘back-and-forth’ between jobs reports from BLS and ADP having conflicting or inconsistent results.”

On Wednesday, the ADP National Employment Report reported the U.S. private sector created 275,000 jobs in April, crushing the consensus forecast and range. The total number of jobs added in March was revised up from 129,000 to 151,000.

“If there is 1 disappointing item in the report, it is that the labor participation rate declined to 62.8% after holding 63.0 or better for the last 4 months,” Mr. Anderson added. “That is a longterm structural issue that still needs some work down the road.”



The Labor Department said labor force participation rate ticked down 0.2% to 62.8% in April, essentially unchanged from a year earlier after a slight tick-up for the first time in years.

The less cited but arguably more important employment-population ratio was unchanged at 60.6% in April. It has been either 60.6% or 60.7% since October 2018.

Wages, or average hourly earnings (AHE) for all employees on private nonfarm payrolls, rose by 6 cents to $27.77. Average hourly earnings of private-sector production and nonsupervisory employees increased by 7 cents to $23.31 in April.

Over the year, average hourly earnings have increased by 3.2%, making April the ninth straight month of wage gains above 3%.

The total number of jobs for February was revised up from +33,000 to +56,000, and March was revised down from +196,000 to +189,000. Combined for the two months, job creation was 16,000 stronger than previously reported.