WASHINGTON–The unemployment rate dipped below 4% in the latest data, but at least two economists say the employment numbers aren’t as strong as they might be perceived.
According to the Labor Department, the April unemployment rate was 3.9% in the latest data, the lowest rate since 2000 and a sign that the job market has become even more competitive. The unemployment rate had held steady at 4.1% since October 2017.
Approximately 164,000 jobs were added, below the expectations of many economists, who had projected 193,000 new jobs.
April marked the 91st consecutive month of job gains.
In a good sign for workers, wages increased by 2.6% over the past year, slightly above the rate of inflation. At its meeting last week, the Fed indicated inflation is increasing at a rate it supports; the FOMC opted not to bump rates up.
"While the unemployment rate dropped to its lowest levels in 17 years, April's jobs growth failed to meet expectations. Wage growth, too, was moderate and labor force participation also slipped during the month," said NAFCU Research Assistant Yun Cohen. "The lack of wage growth could be seen as an indicator that inflationary pressures are not building too quickly."
Similarly, Lindsey Piegza, chief economist with Stifel, added “if the U.S. labor market was as strong as a 3.9% unemployment rate implies with such a minimal amount of labor market slack that such a level suggests, wages would be rising at a much more robust pace. Thus, it’s clear a broader measure of the unemployment rate nearer 8% more accurately depicts the true and more modest health of the labor market."