The unemployment rate in the United States has dropped to its lowest in nearly half a century. The unemployment rate fell to 3.6 percent in the first quarter of the year, the lowest since December 1969. However, the decline in the unemployment rate was largely driven by more people leaving the labor force. Nearly half a million people left the workforce in the quarter, the most in a year and a half.
U.S. employers added a better-than-expected 263,000 jobs in April. It was also disclosed that the economy created 16,000 more jobs in February and March than previously reported. The nation had a monthly average of 186,000 jobs filled in the first three months of the year. The gains are well above the nearly 100,000 jobs per month needed to keep up with growth in the working-age population.
The new jobs created last month were spread across most industry sectors. A Labor Department report showed solid hiring in services, construction, and health care. There is anecdotal evidence of worker shortages in the transportation, manufacturing, and construction industries.
Workers’ productivity surged in the first quarter. Average wages rose at an annual rate of 3.2 percent. Average hourly earnings rose 6 cents, or 0.2 percent, in April after increasing by the same margin in March.
The nearly decade-old economic expansion shows no signs of slowing. The economy will mark 10 years of expansion in July, the longest on record. The economy grew at an annual 3.2 percent rate in the first quarter, higher than the 2.2 percent rate of growth recorded in the October-December period of 2018. Inflation has been running below the Fed’s target of 2 percent.
The outlook for the American economy is rosy. Federal Reserve Chairman Jerome Powell said in a statement, “Our outlook and my outlook is a positive one – is a healthy one – for the U.S. economy for growth for the rest of this year.”