The U.S. unemployment rate fell from 4.1 percent in March to 3.9 percent in April — notably below the Street’s 4-percent forecast. The metric struck its lowest point since December 2000.
Why It’s Important
The percentages represent 239,000 fewer Americans facing unemployment, a cohort supported by the addition of 164,000 new jobs.
Notably, the change accompanied a drop in the labor force participation rate, which fell from 62.9 percent to 62.8 percent. The absolute employment number was also nearly unchanged.
Mohamed El-Erian, the chief economic advisor at Allianz, told Benzinga the Friday report presents a mixed picture.
"While the sub-4-percent unemployment rate is what will capture many headlines, this mixed jobs report highlights two persistent economic puzzles in the context of an impressive multiyear run of job creation: rather sluggish wage growth and the failure of labor force participation to rise."
What’s Next
The measured economic improvement may inspire further tightening of the Federal Reserve’s interest rate. The Fed views 4.2-4.8 percent a “normal rate.”
Friday morning research from CME Group suggested traders see a 95-percent chance of a June rate hike to between 1.75-2 percent. About 69 percent anticipate a September hike to between 2-2.5 percent, and about 40 percent expect a pop to between 2.25-2.5 percent in December.
The Fed left rates unchanged Thursday.
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