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U.S. Economy Creates 223K Jobs In April, Unempoyment Rate Steady At 5.4%

(Kitco News) - The U.S. labor market managed to regain some momentum last month, as the U.S. Labor Department released relatively in line nonfarm payrolls data, reversing March’s significant drop.

Friday, the Bureau of Labor Statistics said 223,000 jobs were created in April, up from March’s revised number of 85,000; March’s initial report pegged the growth at 126,000 jobs. February’s employment data was revised up to 266,000 from 264,000.

According to consensus reports, economists expected to see about 225,000 jobs created last month.

The report said that the unemployment rate remained unchanged at 5.4%. The participation rate was also little changed at 62.8% last month.

“Since April 2014, the participation rate has remained within a narrow range of 62.7 percent to 62.9 percent,” the report said.

Wage growth saw a smaller than expected rise last month, increasing by three cents or 0.1% to $24.87.

“Over the past 12 months, average hourly earnings have increased by 2.2 percent,” the report said.

The average workweek remained unchanged at 34.5 hours.

Although the employment data was relatively in line with expectations some economists are raising concerns about the downward revisions in March. Andrew Grantham, senior economist at CIBC World Markets, said that total revision showed a decline of 39,000 jobs in the previous two months.

“Downward revisions totaling 39,000 to the prior two months took the total change in employment compared with the prior report below the 200K mark,” he said.

Grantham added that the weak wage growth was also “disappointing” and could keep the Federal Reserve postpone an eventual rate hike. He said a trend of firmer wage growth needs to be seen before “before Fed officials are ‘reasonably confident’ that inflation is on the path back to their target.

Paul Ashworth, chief U.S. economist described the April’s labor market as a “bit of a mixed bag” but was weak enough to remove any lingering possibility of a June rate hike off the table.

He agreed that the previous month’s downward revisions take a lot of the shine off the report.

“We may see a further acceleration in employment growth going into the summer, but this isn't the sort of unequivocal rebound that would give the Fed the confidence to begin tightening monetary policy before Independence Day,” he said.


By Neils Christensen of Kitco News;
Follow Neils Christensen @neils_C



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