U.S. non-farm payrolls rise in April, jobless rate falls to lowest since May 2007

U.S. non-farm payrolls rebounded in April, coming in above the consensus expectations. Payrolls rose 211,000, as compared with consensus estimate of 190,000. Private-sector hiring grew 194,000, whereas 17,000 were added to government payrolls, noted TD Economics. The jobless rate dropped to 4.4 percent, the lowest since May 2007. The labor force participation dropped 0.1 percentage points to 62.9 percent.

There were minor revisions made to the prior months’ figures. The previous two months’ average payroll figure was subtracted by 6000. Goods-producing employment was up strongly by 21,000, driven by logging and mining that contributed 10,000 – marking the sixth consecutive months of gains for the sector. Manufacturing added 6000, while construction added 5000. Services-producing employment was up 173,000, led by gains in leisure and hospitality, education and health and business services.

Average hourly earnings rose soundly by 0.3 percent; however, the year-on-year metric dropped to 2.5 percent in April from March’s 2.6 percent. Average weekly earnings rose strongly by 0.6 percent, as hours of work rose to 34.4 hours a week.

The rebound in job should ease concerns that the U.S. economic growth is decelerating in any considerable way. This affirms the U.S. Fed’s message this week that the economy continues to be on track, noted TD Economics in a research report. With the jobless rate pushing below its natural long-run rate, the participation rate continues to be a vital indicator to observe.

The wage growth at 2.5 percent is not flashing red signals yet; however, it is still enough to give real gains in purchasing power. This is likely to flow through to spending in the coming months, giving the boost for stronger economic growth, added TD Economics.