223,000 Jobs Added in April; Unemployment Rate Dips to 5.4%

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The American job market rebounded in April, the government said Friday, as employers added 223,000 positions and the unemployment rate decreased to 5.4 percent.

The figures from the Labor Department should alleviate worries that the economy was on the brink of another stall. Other recent reports have revealed a disappointing start to 2015, including new numbers out this week suggesting that the economy might have actually shrunk in the first quarter. The initial jobs report for March showed a disappointing 126,000 gain, which was revised down on Friday to 85,000.

The data suggest that the Federal Reserve will not be in any rush to take its long-awaited first step in raising short-term interest rates, which have been near zero since the onset of the financial crisis in 2008.

Many experts expected that the Fed might move in June, but the consensus has recently shifted to September or beyond as the probable beginning of any gradual tightening effort by the central bank.

Aside from the payrolls gain, “April’s employment report was otherwise something of a mixed bag,” said Paul Ashworth, chief United States economist for Capital Economics, a research firm. “All things considered, any lingering possibility of a June rate hike from the Fed is now off the table, with September probably the most likely liftoff date now.”

Before Friday’s report, some economists were estimating that average hourly earnings might rise 0.2 percent in April, pushing earnings up 2.3 percent from a year ago, a bit better than the typical pace of annual gains since the end of the recession.

In fact, average hourly earnings rose 0.1 percent in April, producing a 2.2 percent annual gain. That modest showing suggests that any meaningful wage gains for most workers will have to wait.

Another important indicator of overall labor market health is the participation rate, which has been stuck near multidecade lows for years, despite healthy hiring in 2015. Last month, it increased 0.1 percentage point to 62.8 percent.

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SOURCE: NELSON D. SCHWARTZ
The New York Times

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