Job Growth Underscores Economy’s Vigor; Unemployment at Half-Century Low

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The unemployment rate fell to its lowest level in half a century last month, capping the longest streak of job creation in modern times and dispelling recession fears that haunted Wall Street at the start of the year.

The Labor Department reported Friday that employers added 263,000 jobs in April, well above what analysts had forecast. The unemployment rate sank to 3.6 percent.

Employment has grown for more than 100 months in a row, and the economy has created more than 20 million jobs since the Great Recession ended in 2009. Much of that upturn occurred before President Trump was elected, but the obvious strength of the economy now enables him and fellow Republicans to make it their central argument in the 2020 campaign.

For all the signs that the economy is humming, the current expansion doesn’t resemble past booms. The scars of the Great Recession run deep, and even after 10 years of growth, the kind of euphoria that marked the technology sector in the late 1990s or the real estate market in the 2000s is conspicuously absent.

The pace of the current recovery has been weaker than during periods like the 1990s, which is among the reasons wage gains were so tepid until recently. It even prompted some economists to assert that a subdued economy was the new normal.

But the upside of slower growth during the last 10 years may be a longer, more durable expansion, said Michael Gapen, chief United States economist at Barclays. Consumers have been wary of borrowing to the hilt as they did before 2008, while businesses have been cautious about expanding too quickly.

The April data show little threat of troublesome inflation or other signs of excess. The length of the average workweek actually fell, while wage growth for the month was slightly below what was expected. Still, with average hourly earnings up 3.2 percent from a year ago, ordinary workers are finally sharing in the economy’s bounty.

[The continued boom in the American job market suggests that economic policymakers need to be open about when the lessons of history no longer apply, says The Upshot’s economics correspondent.]

The not-too-hot, not-too-cold report was warmly received on Wall Street, where the S&P 500 closed up nearly 1 percent on Friday.

“We can all agree that AMERICA is now #1. We are the ENVY of the WORLD — and the best is yet to come!” Mr. Trump declared Friday on Twitter.

For policymakers at the Federal Reserve, the jobs report will most likely serve as another piece of evidence in favor of leaving interest rates unchanged, a stand that the Fed chairman, Jerome H. Powell, reiterated this week.

Mr. Trump has said the Fed should cut rates, and Vice President Mike Pence made the argument again on Friday, citing low inflation. But Mr. Powell and his colleagues have repeatedly said they will not be swayed by political considerations.

“The U.S. economy is in a very good place,” the Fed vice chairman, Richard Clarida, said in the text of remarks that he delivered on Friday. He also said recent employment gains appeared to be sustainable and were not a sign of an overheating economy.

As recently as the start of this year, investors were worried that the economy could falter because of headwinds like a slowdown in Europe, the trade war with China and Brexit. This report should put those fears to bed — at least for the time being.

“It’s much more exciting than anyone had expected,” said Torsten Slok, chief international economist at Deutsche Bank. “No matter how you slice and dice this, it looks like the economy is doing fine.”

“It doesn’t mean these risks are gone, but it seems like the economy is rebounding from the turbulence of the first quarter,” he added.

Despite the bright picture over all, there were pockets of weakness. Retail employment fell for the third month in a row as stores closed because consumers are increasingly shopping on the internet.

There was also a big drop in the number of people who said they were looking for work. The labor-force participation rate, which measures the share of those 16 and older who are employed or seeking work, sank to 62.8 percent, from 63 percent in March.

That helped reduce the unemployment rate to the lowest level since December 1969.

[Here’s a primer on where the numbers come from and what they mean.]

“The drop in the unemployment rate was encouraging, but it was for bad reasons,” said Michelle Meyer, head of United States economics at Bank of America Merrill Lynch. “The lower participation rate is a little bit of a disappointment, but it’s a volatile number.”

Some economists think the jobless rate will keep dropping.

“I think the unemployment rate could drop toward 3 percent,” Mr. Gapen said. That’s a level last seen in the wake of the Korean War in 1953, and he believes it will happen because employers hire more people, not because people drop out of the work force.

The professional and business services sector led the pack in growth, adding 76,000 positions. Diane Swonk, chief economist at Grant Thornton, said the white-collar hiring reflected the adoption of new technologies in workplaces.

“These people are handling the logistics of implementing this stuff,” forcing businesses to hire more administrative and support workers, Ms. Swonk said. “These are not the kind of admin jobs like we used to have. They’ve moved up significantly in terms of skills.”

In Chicago, HealthJoy added 14 employees in April, bringing its hiring for the year to 36, said Justin Holland, the company’s founder and chief executive. His goal is 250 hires for the year. HealthJoy offers a mobile app that helps employees better navigate their health benefits.

But Mr. Holland said filling positions like data engineers and software developers hadn’t been easy.

“A lot of large companies have moved here and are just sucking up talent,” he said. Mr. Holland is also considering workers who might not have been as appealing a decade ago. “I don’t look at a college degree as a gatekeeper,” he said.

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