The economy gained 164,000 new payroll jobs in April, the Bureau of Labor Statistics reported Friday morning, and the unemployment rate dropped to 3.9 percent, the lowest rate since 2000.
The month’s job growth was just shy of the roughly 190,000 new jobs forecasters expected after a disappointing March report.
[Related: Black, Hispanic unemployment rates hit record lows in April]
Yet, despite the slight miss on jobs, Friday’s report indicates that the labor market recovery has strong momentum even as it ages into its eighth year.
Only around a little more than 90,000 jobs are needed each month to keep unemployment trending down, according to the Federal Reserve. Employers have been adding more than twice that many jobs over the past three months — 208,000, when upward revisions are taken into account.
“We should stop and note how miraculous that is, because we’re very deep into this business cycle,” said Trump economic adviser Kevin Hassett, speaking on Fox Business.
The fact that hiring is so strong is a sign to the Trump administration and the Fed that employment can still grow much further: Robust hiring suggests that there are people willing to take jobs who aren’t currently counted in the official unemployment rate.
“We’re continuing to get tighter and tighter, but hopefully it can continue to pull more people to enter the job market,” Doug Clark, chief portfolio strategist for the bond investment firm Prime Advisors, said of the labor market.
And other details from the household survey in Friday’s report indicate that joblessness is receding to where it was long before the financial crisis struck.
Total underemployment fell to 7.8 percent, the lowest such rate since July of 2001. That rate includes not just the jobless, but also people forced into part-time work or who are only sporadically looking for jobs.
Black unemployment hit a record low of 6.6 percent, while joblessness for Hispanic-Americans tied the record low of 4.8 percent.
For more than four years now, labor force participation has remained mostly steady at just below 63 percent. That stability is an encouraging sign, given that the retirement of the Baby Boom generation and other long-running demographic changes would be expected to hold participation down. It appears that people are rejoining the workforce, or at least staying in it.
Hassett claimed that 900,000 workers have rejoined the workforce during Trump’s tenure.
Overall, unemployment has dropped to the point that many businesses are now claiming worker shortages. Some smaller cities are enticing people in to take open positions by offering monetary incentives, according to the Wall Street Journal. Local press in Minnesota reported that construction companies are struggling to find people to help fulfill contracts.
Yet the Trump administration has set the goal of not just low unemployment, but also greater workforce participation and higher wages. So the subdued pay increases are the biggest sign that there is no economy-wide worker shortage. Trump has pursued a hotter economy by enacting tax cuts and spending increases, and has called for welfare reform to bring even more people into the labor pool.
Hourly wages grew at a 2.6 percent annually in April. While better than seen throughout most of the recovery, that is rate is not the breakout that economists have been looking for.
The Fed too, is likely to keep money relatively easy even with unemployment low and falling and inflation near its target. Without faster wage gains and other signs that inflation is set to actually spike, Chairman Jerome Powell and others at the central bank will stick to the course of gradual rate hikes this year and next.
“It really confirms that the Fed should move cautiously and be gradual with the rate hikes,” Clark said of Friday’s report.
Manufacturing has continued its hot streak into the spring. Manufacturers have added 245,000 jobs over the past year, a big turnaround from past years when U.S. companies got hurt when a rising dollar made their goods more expensive to sell abroad.
Health care has also been a bright spot for the economy, bringing in 305,000 net workers over the past year. Professional services also showed strong hiring in April.
