This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.nytimes.com/2016/05/07/business/economy/jobs-report-unemployment-wages.html

The article has changed 7 times. There is an RSS feed of changes available.

Version 3 Version 4
U.S. Added 160,000 Jobs Last Month as Brisk Hiring Slowed U.S. Added 160,000 Jobs Last Month as Brisk Hiring Slowed
(about 1 hour later)
After months of gravity-defying gains, the American jobs machine cooled in April, as employers took their cue from other signs that economic growth was slowing by easing up on new hiring.After months of gravity-defying gains, the American jobs machine cooled in April, as employers took their cue from other signs that economic growth was slowing by easing up on new hiring.
The 160,000 increase in payrolls in April reported by the Labor Department on Friday came after the best two-year stretch for the job market since the tech-fueled boom of the late 1990s.The 160,000 increase in payrolls in April reported by the Labor Department on Friday came after the best two-year stretch for the job market since the tech-fueled boom of the late 1990s.
The unemployment rate, which is tied to a separate survey of households, stayed at 5 percent.The unemployment rate, which is tied to a separate survey of households, stayed at 5 percent.
While a downshift, the still-healthy pace of hiring contrasts with other economic signals that have been decidedly mixed recently. Late last month, for example, the government reported that the economy barely expanded in the first quarter. While a downshift, the still-healthy pace of hiring contrasted with other economic signals that have been decidedly mixed recently. Late last month, for example, the government reported that the economy barely expanded in the first quarter.
But most experts say the steady gains in the labor market in recent months are a more reliable sign, suggesting that the economy should continue to expand for the rest of 2016, with the pace picking up modestly from the stagnant opening period. But most experts say the steady gains in the labor market in recent months are a more reliable sign, suggesting that the economy will continue to expand for the rest of 2016, with the pace picking up modestly from the stagnant start to the year.
“This isn’t a sign of real weakness,” Diane Swonk, an independent economist in Chicago, said of Friday’s report. “The quality of the jobs improved but the quantity did not,” she added, pointing to a strong gain of 67,000 jobs in the business and professional services category. “It’s a soft report but it doesn’t portend a turn in the labor market,” said Michael Gapen, chief United States economist at Barclays. “I’d be more concerned if there were weakness across the board, but there wasn’t.”
Mostly white-collar, the health of this sector explains why wage growth was also robust. The Labor Department also revised downward its estimate of the number of jobs added in February and March by 19,000. In the last three months, the economy has gained about 200,000 jobs a month on average.
Diane Swonk, an independent economist in Chicago, pointed to the strong gain of 67,000 jobs in the business and professional services category as additional evidence that the broader slowdown in hiring last month was not an ominous sign of trouble ahead.
“The quality of the jobs improved but the quantity did not,” she said, adding that the health of this heavily white-collar sector explained why wage growth was also robust.
The 0.3 percentage point rise in average hourly earnings was the most positive sign of the economy’s trajectory in Friday’s report.The 0.3 percentage point rise in average hourly earnings was the most positive sign of the economy’s trajectory in Friday’s report.
Until a nascent pickup recently, wages had been a sore point throughout the nearly seven-year-old recovery, barely rising in real terms despite the big drop in the unemployment rate.Until a nascent pickup recently, wages had been a sore point throughout the nearly seven-year-old recovery, barely rising in real terms despite the big drop in the unemployment rate.
The change in earnings in April, which was in line with Wall Street’s expectations, suggested that the upward tick in wages wasn’t a fluke. Over the last 12 months, wages are up 2.5 percent, well ahead of the pace of inflation.The change in earnings in April, which was in line with Wall Street’s expectations, suggested that the upward tick in wages wasn’t a fluke. Over the last 12 months, wages are up 2.5 percent, well ahead of the pace of inflation.
Ms. Swonk said there were indications that wages were shoring up, even if the month-to-month pattern had been uneven.Ms. Swonk said there were indications that wages were shoring up, even if the month-to-month pattern had been uneven.
With dozens of states and cities having either already implemented or considering future increases in the minimum wage, she explained, salaries at the low end of the job market are finally inching up. With dozens of states and cities either having already carried out or considering increases in the minimum wage, she explained, salaries at the low end of the job market are finally inching up.
“We’ve hit a tipping point,” Ms. Swonk said. “It’s showing up in low-wage jobs, for waiters and waitresses, in retail and in leisure and hospitality.”“We’ve hit a tipping point,” Ms. Swonk said. “It’s showing up in low-wage jobs, for waiters and waitresses, in retail and in leisure and hospitality.”
States including California, Colorado, Michigan and Massachusetts increased their minimum wages at the start of 2016, while Maryland and the District of Columbia are set to enact raises on July 1.States including California, Colorado, Michigan and Massachusetts increased their minimum wages at the start of 2016, while Maryland and the District of Columbia are set to enact raises on July 1.
Whether a result of legally mandated increases at the bottom or because of raises doled out by employers looking to retain more skilled workers in a healthier economy, better-paying and more plentiful jobs has been luring workers back into the job market. The proportion of Americans in the labor force dropped last month to 62.8 percent from 63 percent in March, partially reversing a rebound that began last fall after the participation rate hit lows last seen in the 1970s.
But the proportion of Americans in the labor force dropped last month to 62.8 percent in April from 63 percent in March, reversing gains in recent months. Like the unemployment rate, participation in the labor force is measured in the Labor Department’s household survey, which is separate from the survey of businesses that is used to calculate the change in payrolls.
When roughly 40,000 Verizon workers went on strike last month, it was right in the middle of the week that government number crunchers analyze to gauge the strength of the job market. That may have had a modest impact on the numbers reported by the Labor Department. Although the two tend to correlate over time, the household survey is more volatile, and April was no exception. It showed more than half a million people leaving the work force.
“The good news is that we are re-engaging people who’ve been on the sidelines,” Ms. Swonk said. “The question is how far we can go.” Although the payroll numbers and the unemployment rate tend to dominate the headlines, the Federal Reserve pays close attention to the participation rate.
That question is also being pondered by Janet L. Yellen, the chairwoman of the Federal Reserve. Though the central bank kept rates steady when policy makers met last month, some economists argue they could move at their June meeting. And April’s softness may persuade Janet L. Yellen, the Fed chairwoman, and other policy makers to remain cautious about future interest rate increases.
But with inflation still very subdued and more dovish officials worried that another rate increase could choke off growth, other experts argue that any tightening in monetary policy will not happen until later in the year. Though the central bank kept rates steady when policy makers met last month, some economists had argued they could move at their June meeting.
Indeed, some notable pockets of weakness remain in the nation’s economy, especially in regions dominated by manufacturing and the energy industry. But with inflation still very subdued and more dovish officials worried that another rate increase could choke off growth, many experts say that any tightening in monetary policy will not happen until later in the year.
In the first three months of 2016, factories shed 47,000 jobs, hurt in part by a stronger dollar and weaker overseas demand. Manufacturing sector employment rose by 4,000 in April. “The Fed wants to see evidence that the economy is accelerating, and this doesn’t show that,” Mr. Gapen said. “So it’s likely to lead the Fed to prefer to be cautious.”
After the report, Barclays told clients in a note that the April data put a rate increase in June “off the table,” and the bank expected only one interest rate increase by the Fed this year rather than two as previously estimated.
Some notable pockets of weakness remain in the nation’s economy, especially in regions dominated by manufacturing and the energy industry.
In the first three months of 2016, factories shed 47,000 jobs, hurt in part by a stronger dollar and weaker overseas demand. Manufacturing employment rose by 4,000 in April.
The oil patch is still reeling from the impact of sharply lower energy prices, despite a recent rebound. Other commodity-based industries like metals and mining are also hurting.The oil patch is still reeling from the impact of sharply lower energy prices, despite a recent rebound. Other commodity-based industries like metals and mining are also hurting.
Between January 2015 and March 2016, the mining and logging sector lost 170,000 jobs. In April, miners and loggers cut another 8,000 jobs. Between January 2015 and March 2016, the mining and logging industry lost 170,000 jobs. In April, miners and loggers cut another 8,000 jobs.
Over all, the muted tone of April’s report wasn’t because of a big drop in any particular industry, although public sector employment fell by 11,000. Instead, pacesetters with big gains in previous months like retailers hit the brakes on new hiring. Over all, the muted tone of April’s report wasn’t because of a big drop in any particular industry, although public sector employment fell by 11,000. Instead, pacesetters with big gains in previous months, like retailers, hit the brakes on new hiring.
Despite contradictory macroeconomic signals, in hot fields like health care, technology and professional services, employers are scrambling to find new employees. In Chicago, ContextMedia brought 25 new employees aboard in April and plans to add about 100 workers a quarter for the rest of 2016, said Iman Jalali, the company’s chief of staff. When roughly 40,000 Verizon workers went on strike last month, it was right in the middle of the week that government number crunchers analyze to gauge the strength of the job market.
ContextMedia provides tablets and digital wallboards for doctor’s offices, supplying the devices, software and content for patients to access information during their visits. Before the report, some economists predicted that the strike could have a modest impact on the numbers. Mr. Gapen said he did not think that was the case, because the telecom industry did not register a big drop in employment.
Salaries for software developers with several years’ experience can top $100,000 and it is a similarly competitive market for account managers, sales representatives and marketers. “The market is tighter,” Mr. Jalali said. Despite contradictory macroeconomic signals, in hot fields like health care, technology and professional services, employers are scrambling to find new employees. In Chicago, ContextMedia brought 25 new employees aboard in April and it plans to add about 100 workers a quarter for the rest of 2016, said Iman Jalali, the company’s chief of staff.
“We’re trying to attract talent from across the country,” he added. “We’ve got some of the best people in Chicago but when you are growing so quickly you need to keep growing the pool.” ContextMedia provides tablets and digital wallboards for doctors’ offices, supplying the devices, software and content for patients to obtain information during their visits.
Salaries for software developers with several years’ experience can top $100,000, and it is a similarly competitive market for account managers, sales representatives and marketers. “The market is tighter,” Mr. Jalali said.
“We’re trying to attract talent from across the country,” he added. “We’ve got some of the best people in Chicago, but when you are growing so quickly, you need to keep growing the pool.”