MW: U.S. creates 211,000 jobs in April as hiring rebounds
WASHINGTON (MarketWatch) â€” Some 211,000 people found new jobs in April as hiring rebounded from a wobbly showing in early spring, offering fresh evidence the U.S. economy is still growing at healthy clip and paving the way for the Federal Reserve to raise interest rates soon.
The unemployment rate, meanwhile, dipped to 4.4% from 4.5% to set a postrecession low. The last time the rate was so low was in May 2007, shortly before the onset of the Great Recession.
The increase in new jobs last month, led by hotels, restaurants and health-care providers, exceeded Wall Streetâ€™s expectations. Economists polled by MarketWatch had predicted a 190,000 increase in nonfarm jobs.
In the first four months of this year, early in Donald Trumpâ€™s presidency, the U.S. has added an average of 185,000 jobs a month. Thatâ€™s almost the same as in the final year of former President Barack Obama.
Stock futures pointed to a flat opening for the Dow Jones Industrial Average DJIA, -0.03% Treasury yields rose.
The rebound in hiring keeps the Fed on course to raise U.S. interest rates again soon. Fed VIPs this week dismissed the slowdown in first-quarter economic growth as â€śtransitory,â€ť a judgment backed up by Aprilâ€™s robust employment gains.
The central bank is prepared to gradually raise a key rate that dictates the cost of borrowing for consumers and businesses. The Fed wants to make sure the economy doesnâ€™t run too hot and spark a return of inflation.
One potential source of higher inflation is wages. With such a tight labor market, companies have to pay more to attract or hold onto their workers. Yet pay is still not rising fast enough to stoke inflation worries.
Hourly pay rose 0.3% in April to $26.19 an hour, the government said Friday. Over the past 12 months, hourly wages have climbed 2.5%, a sharp upturn compared to less than 2% a few years ago. But pay growth has slowed since hitting a recent 2.9% peak in December.
Wage growth is also running below the 3% to 4% pace that usually prevails at this stage of an economic recovery, suggesting that a breakout in inflation is unlikely.
Job growth in prior months was little changed, revisions show. The government cut its estimate of new jobs created in March to 79,000 from 98,000, which was the smallest increase in more than a year.
The low level of hiring in March was likely affected by poor weather, however, and economists dismissed it as one-off that the disguised the true strength of the U.S. economy.
The increase in new jobs in February was raised to 232,000 from 219,000.