U.S. payrolls grew by 263,000 in April, driving the unemployment rate to a 50-year low.
Gains included the addition of 12,500 federal government employees, 13,900 new professional and technical positions and 4,000 manufacturing posts, the U.S. Labor Department said Friday. The expansion easily outpaced the average estimate of 181,000 from economists surveyed by FactSet.
Michael Gapen, an economist with British lender Barclays Plc, had predicted gains of 200,000, while Ellen Zentner, an economist with New York-based investment bank Morgan Stanley, had said employers might add as many as 233,000 workers, fueled partly by early hiring for the 2020 census. In April 2009, a year before the last census, federal government payrolls expanded by 125,000, she noted.
“As members of the college graduating classes of 2019 prepare to don caps and gowns, the employment outlook is one of the best in years,” said Mark Hamrick, senior economic analyst for Bankrate.com.
“This was a very impressive report,” he told the Washington Examiner. “Obviously, there was an upside surprise with both payrolls and the unemployment rate, and that’s a nice combination to see.”
Joblessness of 3.6% was the lowest since 1969, surpassing a previous bottom of 3.7% in November and bolstering President Trump as the 2020 race draws closer and Democratic rivals criticize his immigration policies and protectionist trade moves. The president has made U.S. economic a growth a priority, and political analysts have said his success in the labor market is a pivotal asset in his reelection bid.
[Read more: Majority of Americans approve of Trump’s handling of economy: Poll]
The results may, however, undercut the administration’s push for more lenient monetary policy, either through an interest rate reduction or resuming the purchase of government bonds to loosen up capital markets, a tactic employed during the financial crisis and known as quantitative easing.
The Federal Reserve left interest rates, now between 2.25% and 2.5%, unchanged at its meeting earlier this week, though it has begun to taper the slow wind-down of a balance sheet that swelled to $4.5 trillion through quantitative easing.
The retail industry, expected to add jobs as warm weather and a late Easter holiday boosted sales, struck a sour note instead. Employers trimmed 12,000 positions, the Labor Department reported, as retailers closed brick-and-mortar stores while investing in online sales.
Bed Bath & Beyond, the home goods chain, said in April that it expects to shutter 40 locations through next February, while women’s wear chain Francesca’s closed 26 boutiques last year.
“There does seem to be an acceleration in store closings, which is impacting employment,” Hamrick said. The declining number of in-store roles, however, is partially offset by gains in warehouse jobs for e-commerce operations, he added.
