In terms of the numbers, 223,000 jobs were added last month, a much larger number than the disappointing 85,000 jobs added in March, the lowest such gain since June 2012. As well, the Labor Department report outlined that the unemployment rate dropped to 5.4 percent, a new seven-year low and a decrease from March’s unemployment rate of 5.5 percent. Previously, investors and experts had blamed March’s dismal numbers to the “exceptionally cold winter,” which hindered hiring and recruiting processes. It seems with the thawing of the snow, the U.S. economy is similarly looking for new opportunities and chances for growth.
One should note, however, that though many economists believed pay increases would follow the drop in unemployment, this has not been the case. As reported by The Dallas Morning News, even “before Friday’s report, some economists were estimating that average hourly earnings might rise 0.2 percent or more in April…But average hourly earnings rose only 0.1 percent in April.” This suggests that “meaningful wage gains” are still being delayed. As Tara Sinclair, chief economist for Indeed.com told The Dallas Morning News, “There’s still slack” and employers feel little pressure to increase salaries.
Despite the generally good news about the U.S. economy, one industry has experienced steady and sharp declines as the result of oil price declines over the past year. As a sign of the times, Reuters reports that Schlumberger, the world’s No. 1 oil-field services provider, was forced to cut 11,000 jobs last month alone and has in total dismissed 20,000 workers and mining payrolls “fell 15,000, logging the fourth straight month of declines.” Conversely, Reuters reports that whereas the energy and mining industries experienced hardships, construction payrolls as well as manufacturing and private services employment, all saw increases in their payroll. Given this news, economists now believe that the Fed will surely raise short-term interest rates above their near zero value, though no one is yet sure when this raise will occur.
(Photo courtesy of Public Information Office)