U.S. payroll gains rebounded in April by more than forecast and the jobless rate unexpectedly fell to 4.4 percent, signaling that the labor market remains healthy and should support continued increases in consumer spending.
The 211,000 increase followed a 79,000 advance in March that was lower than previously estimated, a Labor Department report showed Friday. The median forecast in a Bloomberg survey of economists called for a 190,000 gain. While the unemployment rate is now the lowest since May 2007, wages were a soft spot in the report, climbing 2.5 percent from a year earlier.
The unemployment rate compares with economists’ projection for 4.6 percent. It’s now below the 4.5 percent level where Fed policy makers in March had forecast it would reach in the fourth quarter, based on their median estimate.
Employment gains were broad-based though concentrated in services in April. Leisure and hospitality registered a 55,000 increase, education and health services was up 41,000 and financial activities rose by 19,000. Retail rebounded with a 6,300 increase following a revised loss of 27,400.
Wage growth accelerated on a monthly basis to 0.3 percent from a revised 0.1 percent gain in March. At the same time, the 2.5 percent year-over-year gain in average hourly earnings was the weakest since August, following a 2.6 percent rise in March.
The participation rate, which indicates the share of working-age people who are employed or looking for work, decreased to 62.9 percent from 63 percent the prior month.