Skip to main content
Menu
The U.S. Job Market Is On A Historic Growth Streak

Hiring was strong in April. If that sounds unremarkable, or even boring, it’s perhaps worth reflecting on why: The recovery in the U.S. job market has been remarkable for its durability and resilience.

U.S. employers added 211,000 jobs in April, the Bureau of Labor Statistics said Friday. That was a big increase from the previous month and modestly ahead of economists’ expectations. The unemployment rate ticked down to 4.4 percent, its lowest level in nearly a decade. Hourly earnings posted solid gains.

April marked the 79th straight month of job growth, by far the longest such streak on record. The U.S. has added 15 million jobs over that period, nearly 200,000 per month. When the streak began in October 2010, the unemployment rate stood at 9.4 percent, and it would have been higher if government economists counted the millions of Americans who had stopped looking for work; today, the unemployment rate has fallen so far that many economists question how much lower it can go.

Perhaps more remarkable than the recovery’s length has been its resilience. Time and again, one or two weak months of hiring have sparked fears that the recovery was nearing its end; time and again, job growth rebounded. The past two months are a good example: Hiring slowed sharply in March, when employers added just 79,000 jobs, but quickly rebounded in April.

There are still weak spots in the job market, even after six and a half years of growth. Wages are rising, but their recent growth has been disappointing. There are signs of trouble in the retail sector, where hiring has been weak. And joblessness remains high among certain groups, such as young black men.

But there are also signs that the long recovery is at last spreading to hard-to-reach corners of the job market. As economist Betsey Stevenson noted Friday morning, the recent drop in the unemployment rate has been concentrated among less-educated workers. That suggests that with fewer Americans looking for work, employers are hiring people they might otherwise have overlooked. We’ve seen that pattern before: in the late 1990s, which not coincidentally is the last time the U.S. saw a sustained period of income growth for people up and down the earnings ladder.

It’s unclear how long the strong job market will last. The current economic recovery, which dates to mid-2009, is already among the longest since World War II. And hiring could slow even if the recovery continues: The Federal Reserve has been raising interest rates to prevent inflation, which could also lead to reduced hiring. For now, though, the job market remains on solid footing.

Here are a few more observations from Friday’s report:

Earnings rise: Average earnings rose 7 cents an hour in April, to $26.19. That’s a decent one-month gain, but the monthly figures are volatile — it’s better to look at the trend over a full year, which showed earnings rising 2.5 percent from April 2016.

Earnings are rising a bit faster than inflation (which is running about 2 percent per year), and that’s good news. But unlike in 2015 and early 2016, growth isn’t accelerating — earnings growth has been holding more or less steady between 2.5 percent and 3 percent for a year now. That’s disappointing given the falling unemployment rate, which should force companies to raise pay in order to attract workers. Meanwhile, wages are rising even more slowly for non-managers.

Retailers add jobs: The retail sector slashed jobs in February and March, cutting 56,000 positions over the two months combined and contributing to fears of a “retail apocalypse.” So it was a relief to see retailers add jobs in April, albeit only 6,000 of them. Still, the retail sector faces major long-term challenges: the rise of online shopping, heavy debt loads, too many malls. And there are signs of trouble in the consumer economy more generally: Spending was weak in March, according to a separate report released this week, and auto sales in particular have been struggling. On the other hand, the leisure and hospitality sector added 55,000 jobs in April, suggesting that Americans are still willing to shell out for vacations and nights out.

Other key sectors were generally strong in April. The health care and professional services sectors, both of which generally pay well, posted strong job gains, as did the government. Manufacturing and construction also added jobs, though only a few thousand apiece.

Unemployment falls: The unemployment rate fell to 4.4 percent, the lowest it has been since May 2007. Unemployment can be a misleading indicator, because people who aren’t actively looking for work aren’t considered “unemployed” in official statistics. But in this case, the measure you use doesn’t make much difference: Broader measures of un- and underemployment fell too. The broadest measure, which includes people who have stopped looking for work and those who are working part time because they can’t find full-time jobs, fell to 8.6 percent, below where it was when the recession began in December 2007.

Many economists also watch another measure: the labor force participation rate, which measures the share of the population that is either working or actively looking for work. The participation rate edged down in April and has been more or less flat for over a year. That may be good news, however: The retirement of the baby-boom generation is putting enormous downward pressure on the participation rate. The fact that it has stopped falling suggests that more working-age adults are entering or returning to the labor force, helping to offset the departure of retiring boomers.

Ben Casselman is a senior editor and the chief economics writer for FiveThirtyEight.

Comments