US Unemployment Rate Falls to 10-Year Low

Over last couple of months, US job growth had managed to gain significant growth despite slowing down in April. Thanks to the acceleration in April, the unemployment rate hit record low since 2007 as an estimated 211,000 job positions were created during this time.

Interestingly, the result surpassed economists’ prediction of 180,000 new jobs for the month although new figures released by US Labor Department have showed declined labor force participation rate. The recent data reported by the department has shown that the labor force participation rate has gone down to 62.9 percent from 63 percent. Despite that, Chief Economist at PNC has said that the US employment market is in solid shape as the economy is currently approaching towards full employment.

Understandably as the holiday season is approaching, employment opportunities in the hospitality, healthcare have gone higher with 92,000 new positions. However, wage growth has slowed down as hourly earnings have gone up .3 percent in April to $26.19. As the rate of wage growth is slower since last August, it might create problem for US central bank in case of rising interest rate in the coming months. Talking about the slow wage growth, a senior economist at ING James Knightley said it as he said, “The fact that we are still quite a way away from the Fed’s target of three percent wage growth means that there is no real pressure on the Fed to accelerate the pace of interest rate hikes.”

Source: AFP, Reuters

Featured Image: Wikimedia Commons

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