The U.S. economy added 164,000 jobs in April, and the unemployment rate fell to 3.9 percent — the lowest point since 2000, the government’s employment report said Friday.
The average hourly wage rose by 2.6 percent year-over-year, maintaining a slow pace of growth, according to forecasts.
For the past six months, the jobless rate had clung to 4.1 percent, the longest it has gone without budging since the late 1960s. (The record to beat: nine months.) The streak defied the expectations of economists, who said the nation’s prolonged hiring blitz — an average of 202,000 new positions each month in 2018 — was bound to drive the figure down.
Recent signals imply the U.S. will finally see that smaller number.
New government data suggest that fewer people are facing layoffs: Initial claims for state unemployment benefits hit 211,000 during the last week of April, the lowest level since March 1973.
President Donald Trump quickly jumped on the report with an early Friday tweet, “Because Jobs in the U.S. are doing so well, Americans receiving unemployment aid is the lowest since 1973. Great!”
If the expansion further gains steam, analysts at the Fed said the unemployment rate could reach 3.7 percent, a figure not seen since 1969.
Economists say the tightening labor market should accelerate wage growth.
“The longer the economy burns hot, the more workers are in the driver’s seat negotiating with companies,” said Andrew Chamberlain, chief economist at Glassdoor, a jobs site.
That should bring “not spectacular, but slowly building” raises as employers struggle to fill vacancies.
A demographic shift partly explains why employers are struggling to find talent. Baby boomers, which today represent a third of the workforce, are retiring in droves, said Joe Brusuelas, chief economist at RSM, an international consulting firm. Younger workers aren’t replacing them.
And although millennials constitute 35 percent of America’s workers, they’re more likely than previous generations to have attended college – and less likely to have picked up a trade at vocational school. They’re less likely to take jobs in construction and manufacturing. (Employers in both sectors have turned to raises and high school recruiting to shrink their gaps.)
“We are in a demographically induced tight labor market,” Brusuelas said.
Companies across the country have already made adjustments to account for the dearth of applicants. More employers, including blue-collar firms, are offering larger bonuses (which do not show up in the government’s wage data). They’re ramping up on-the-job training, which economists say will play a larger role in the economy as technology advances.
Although some businesses say the lack of available talent thwarts their growth, the U.S. has experienced a steady hiring streak this year, adding an average of 202,000 new positions each month. (Progress dipped in March, but economists blamed the unusually snowy weather.)
Becky Barr, head of data insights at Adzuna.com, a jobs site, said health care is driving much of the trend, with openings up 37 percent in the past four months (268,610). Government vacancies, according to her analysis, have also been on the rise since February (40,000).
“We’ve seen great movement in jobs creation,” she said.
Washington Post writer Brian Murphy contributed to this report.
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