US Job Report reveals US Unemployment rate falls to 5.4% for April: Fed raise … – Benchmark Reporter

The unemployment rate fell to a close seven-year low of 5.43%, consequently, rebounding the job growth rate.

Payrolls steep up to 223,000 in private sectors while the construction jobs payroll rise particularly in mining. The Labor department said, one tenth of the percentage for unemployment rate inclined to its lowest level since May 2008.

As the unemployment rate goes down, people pour into the labor market, increasing the job growth rate.

 "We see this report as reducing concerns that weak first-quarter growth represents a loss of economic momentum," said Michael Gapen, chief U.S. economist at Barclays in New York.

Nonetheless, the Fed is unable to increase the rates before September as the bounce back was not strong enough. The payrolls revised in March showed that 85,000 jobs were created. This is the lowest amount since June 2012. As a result, February added 39,000 jobs which was considered fewer compared to the March amount.

The U.S. stocks were applauded by the investors on the Wall Street which was a 1% higher than before.  The treasury department yield dropped, resulting in the raise in the Central Bank's rates.

The Tightening of the Labor market:

The Fed authority are considering the 5% – 5.23% range of unemployment drop as consistent and several economists commented that the weak labor market can make Fed officials to tighten the monetary policy.

"Even without wages or inflation picking up, we do not think the Fed will feel comfortable sitting at zero as the unemployment rate closes in on 5 percent," said Michelle Girard, principal economist in Stamford, Connecticut.

However, wages were on a feeble mark which rose in April with a three cents up. The 2.2% gain stayed in that range for the past few years.

"With the unemployment rate approaching full-employment levels it will only be a matter of time before wages start to rise at a somewhat swifter pace," said Scott Anderson, chief economist at Bank of the West in San Francisco.

In April, growth of job escalated with the mining sector in particular, whereas, the crude oil prices lowered the production of energy through the rate reduction. Mining payroll declined to fifteen thousand and the oil and gas industry reported the highest rate decline in job growth since September 1992.