x Abu Dhabi, UAETuesday 25 July 2017

American jobless rates fall in April

American employers took on more workers than forecast in April and the jobless rate unexpectedly fell to a four-year low of 7.5 per cent, reflecting confidence in the outlook for the world's biggest economy.

American employers took on more workers than forecast in April and the jobless rate unexpectedly fell to a four-year low of 7.5 per cent, reflecting confidence in the outlook for the world's biggest economy.

Payrolls expanded by 165,000 following a revised 138,000 increase in March that was larger than first estimated, Labor Department figures showed today in Washington. Revisions added a total of 114,000 jobs to the counts for February and March.

Stocks rallied, sending the Dow Jones Industrial Average briefly above 15,000 for the first time, as the report bolstered expectations that the almost four-year economic expansion will overcome a second-quarter slowdown. Hiring advanced even as employers witnessed the onset of planned government spending reductions that the Federal Reserve said are hindering growth.

"The US labour market is not looking as bad as was feared," said Aneta Markowska, the chief US economist at Societe Generale in New York, who correctly projected the jobless rate. "Businesses obviously cut very sharply during the recession and now that revenues are growing, they have to add to headcounts. If we do see some improvement in demand in the second half of the year, which I expect to happen, that will lead quickly to additional job creation."

The median payrolls forecast of 90 economists surveyed by Bloomberg was for a 140,000 advance. Projections ranged from gains of 100,000 to 238,000 following an initially reported 88,000 increase in March.

The difference between today's unemployment-rate outcome and the average estimate of economists surveyed by Bloomberg was 1.8 times larger than the poll's standard deviation, or the average divergence between what each economist forecast and the mean. The payrolls figure was 1 time larger.

Labuor-market gains in the US contrast with weakness in Europe, where a report today showed that the euro-area economy will shrink more than previously estimated in 2013 as part of a two-year slump that has pushed up unemployment to a record.

Gross domestic product in the 17-nation currency bloc will fall 0.4 per cent this year, compared with a February prediction of 0.3 per cent, the European Commission said. This follows a 0.6 per cent contraction in 2012.

 

* Bloomberg News