WASHINGTON – The U.S. unemployment rate fell to 3.9 percent in April, the lowest rate in 30 years, the Labor Department said on Friday in a report likely to put pressure on the Federal Reserve to raise interest rates more aggressively. The low unemployment rate could make it more difficult for employers to find temporary and seasonal workers during the busy summer landscaping season.
Payrolls outside the farm sector rose by 340,000 in April, with job creation boosted by the hiring of 73,000 workers for this year's Census. That compared with upwardly revised gains of 458,000 in March, a month helped by a five-week reporting period instead of the usual four-week period.
Average hourly earnings – a key gauge of wage pressures, which is closely watched by the inflation-wary Fed – rose an expected 0.4 percent to $13.64 after a similar gain in March.
"This will reinforce what the Fed and most people believe, that the labor markets are incredibly tight and it is starting to impact inflation numbers," said Brian Reynolds, money fund portfolio manager at Jones and Babson Inc. in Boston.
April's payrolls gains were driven by job creation in the service-producing area. Services added 121,000, retail trade added 119,000 jobs and government employment rose 107,000 boosted by the Census workers. Those gains were offset by a 55,000 decline in construction while manufacturing added a slim 11,000 jobs.
The available pool of labor – an indicator highlighted by Fed Chairman Alan Greenspan as a good gauge of labor-market tightness – fell 4.1 percent to 9.88 million workers.
Employment for Hispanics in April fell to a record low of 5.4 percent. Unemployment for blacks dropped to 7.2 percent, also a record low.
The unemployment rate has been below 4.2 percent since October 1999, and this is the first time the rate has been below 4.0 percent since January 1970. The number of unemployed persons was 5.5 million.