US nonfarm payrolls top expectations, unemployment rate ticks lower
By Michele Maatouk
Date: Friday 05 May 2017
(ShareCast News) - The US created more jobs than expected in April while the jobless rate unexpectedly declined, according to the latest release from the Labor Department.
Non-farm payrolls rose by 211,000 compared to a 79,000 gain the month before, comfortably exceeding analysts' forecasts for a 185,000 jump. The gain for March was revised down from 98,000.
Job gains occurred in leisure and hospitality, healthcare and social assistance, and financial and mining activities.
Leisure and hospitality added 55,000 jobs, while employment in healthcare and social assistance was up 37,000 in April and financial activities added 19,000 jobs. Employment in mining rose by 9,000.
Meanwhile, the unemployment rate ticked down to 4.4% from 4.5%, beating expectations for a nudge higher to 4.6% and marking the lowest rate since May 2007.
Hourly pay was up 0.3% to $26.19, while over the year, it rose 65 cents or 2.5%, down from 2.6% the month before.
The participation rate, which shows the share of working-age people who are employed or looking for work, nudged just a touch lower to 62.9% from 63% in March. The seasonally-adjusted number of people working part-time who would prefer to be in full-time employment declined to 5.27m, its lowest level since April 2008.
Oanda analyst Craig Erlam said: "We've had another mixed jobs report from the US today that will likely do nothing to either encourage or deter the Fed when it comes to deciding whether to raise interest rates next month.
"Arguably the most important aspect of the report was wage growth given that the Fed has all but achieved its full employment mandate but continues to fall a little short on inflation. With the Fed pinning their hopes on a tighter labour market spurring higher levels of wage growth - which is still far from reaching the levels prior to the financial crisis - traders are understandably a little underwhelmed today. Wages grew by only 2.5% compared to last year, remaining stubbornly around the levels we've seen over the last year."
Neil Wilson, senior market analyst at ETX Capital, said the figures were "not too hold and not too cold".
"As we needed it, today's nonfarm payrolls are just right to nail on a June rate hike but not enough to make us think the Fed will turn more hawkish. After a big miss in March, the April number was a big beat at 211k.
"Judging by these numbers the US labour market remains in rude health and should offer the Fed all the ammunition it needs to raise rates again in June. After some doubts were cast over the pace tightening by the Q1 GDP miss, the Fed looks justified in thinking this would be transitory."
Capital Economics said: "All things considered, a solid report that shows labour market conditions are now unusually tight. The Fed will respond accordingly."
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