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Unemployment Drops To Lowest Rate In 50 Years, April Jobs Number Exceeds Forecasts

Elizabeth Balboa

Analysts expected nonfarm payroll growth of 185,000 jobs, and the market didn’t disappoint. The national employment metric grew from 196,000 in March to 263,000 in April, according to the Bureau of Labor Statistics.

The U.S. unemployment rate fell from 3.8 percent to 3.6 percent — the lowest rate since December 1969.

The Breakdown

The payroll expansion reflected growth in professional and business services (76,000), construction (33,000), health care (27,000), social assistance (26,000), financial activities (12,000), and manufacturing (4,000). Retail saw a decline of 12,000, while other industries showed little change.

Average hourly earnings rose 6 cents, while the average workweek contracted 0.1 hours.

The Analysis

The figures may reflect a surge in temporary federal hires for the 2020 census, according to Bloomberg. The U.S. Census Bureau has begun hiring for “hundreds of thousands” of positions.

Meanwhile, the unemployment rate may reflect a 0.2 percentage point decline in the labor force participation rate.

Accounting for the jobs situation, the Federal Reserve maintained interest rates on Wednesday. The decision not to raise rates incentivizes companies to continue spending on growth factors, which include labor.

"There was pretty solid headline strength as a result of a sizeable pickup in government workers because of the census coming up," Shawn Cruz, senior trading specialist at TD Ameritrade told Benzinga. "If you look at services, there was a pretty sizable drop in retail workers, but that was more than made up for in transportation and warehousing, which reflects the change in the retail sector."

Revisions

The BLS revised its February payroll figures from 33,000 to 56,000. It also amended its March record from 196,000 to 189,000. With the revisions, the bureau recorded average job gains of 169,000 for the last three months.

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