Unemployment Drops To 3.6%, 263,000 Jobs Added, Showing Economy Remains Strong
Updated at 2:15 p.m. ET
U.S. employers added a better-than-expected 263,000 jobs in April, as the nearly decade-old economic expansion shows no signs of slowing. And the unemployment rate dropped to 3.6% — the lowest in nearly 50 years.
In March, the jobless rate was 3.8%. A monthly snapshot from the Labor Department showed solid hiring in services, construction and health care.
"Our outlook and my outlook is a positive one — is a healthy one — for the U.S. economy for growth for the rest of this year," Federal Reserve Chairman Jerome Powell said Wednesday.
The economy picked up steam in the first quarter, growing at an annual 3.2% rate — well above its pace at the end of 2018. Retailers saw strong sales in March after a ho-hum February.
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The pace of hiring in April was stronger than the monthly average of 186,000 jobs in the first three months of the year. Analysts had expected the April number to grow by about 185,000.
Average wages rose at an annual rate of 3.2% — strong, but not enough to spark fears of inflation. Workers' productivity surged in the first quarter, and the additional output helped employers keep their costs in check.
"We don't see any evidence at all of overheating," Powell said Wednesday. "For a long time now, there have been anecdotal reports of labor shortages and difficulty in finding skilled labor and that kind of thing. Nonetheless, you have very strong job creation."
Inflation has been running below the Fed's target of 2%. But Fed policymakers opted not to lower interest rates at their meeting this week, despite pressure from President Trump.
Trump tweeted on Tuesday that the U.S. economy would go "up like a rocket" if the Fed slashed rates by a full percentage point. Powell said the Fed would not be swayed by pressure from the White House.
"We are a nonpolitical institution," he said. "And that means we don't think about short-term political considerations. We don't discuss them, and we don't consider them in making our decisions, one way or the other."
One weak spot in Friday's jobs report was manufacturing employment. Factories added just 4,000 jobs in April and revised figures showed no growth in March. Manufacturing had been adding an average of 22,000 jobs a month in the 12 months before February.
An index of manufacturing activity this week showed a significant slowdown, although the factory sector continues to grow.
"Manufacturing has been weak all around the world," Powell said. "Services have been growing faster. But we do expect a positive contribution to growth from the manufacturing sector."
Labor force participation also dipped as nearly half a million people left the workforce, pushing the unemployment rate down. The strong job market has been drawing people off the sidelines in previous months.
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