Unemployment falls nearly to 1969 levels; hiring is solid

Another month of strong hiring drove the nation’s unemployment rate down to 3.8%. Employers added 233,000 jobs in May, the Labor Department said, and unemployment fell to an 18-year low.

Another WASHINGTON — month of strong hiring drove the nation’s unemployment rate down to 3.8 percent — tantalizingly close to the level last seen in 1969, when Detroit still dominated the auto industry and the Vietnam War was raging.

Employers added 233,000 jobs in May, up from 159,000 in April, the Labor Department reported Friday. And unemployment fell to an 18-year low.

The report shows that the nearly 9-year-old economic expansion — the second-longest on record — remains on track and may even be gaining steam. Employers appear to be shrugging off recent concerns about global trade disputes.

“The May jobs report revealed impressive strength and breadth in U.S. job creation that blew away most economists’ expectations,” said Scott Anderson, chief economist at Bank of the West.

With the unemployment rate so low, businesses have complained for months that they are struggling to find enough qualified workers. But Friday’s jobs report suggests that they are taking chances with pockets of the unemployed and underemployed whom they had previously ignored.

Investors welcomed the report. The Dow Jones industrial average rose almost 220 points, or 0.9 percent, on the day. Other indexes also moved higher.

The healthy jobs data makes it more likely that the Federal Reserve will keep raising interest rates this year — two and possibly three more times, after doing so in March.

Unemployment dropped from 3.9 percent in April. When rounded to one decimal, as the Labor Department typically does, the official jobless rate is now the lowest since April 2000.

But the unrounded figure is 3.75 percent, the lowest since December 1969. Unemployment remained below 4 percent for nearly four straight years in the late 1960s, but it rose to 6.1 percent during a mild recession in 1970. It didn’t fall below 4 percent again until the dot-com-fueled boom of the late 1990s.

Businesses desperate to hire are reaching deep into pools of the unemployed to find workers. Unemployment among high school graduates fell sharply to 3.9 percent, a 17-year low. For black Americans, it hit a record low of 5.9 percent.

And the number of parttime workers who would prefer full-time jobs is down 6 percent from a year ago. That means businesses are converting some part-timers to full-time work.

Companies are also hiring the long-term unemployed — those who have been out of work for six months or longer. Their ranks have fallen by nearly one-third in the past year.

That’s important because economists worry that people who are out of work for long periods can see their skills erode.

Those trends suggest that companies, for all their complaints, are still able to hire without significantly boosting wages.

Average hourly pay rose 2.7 percent in May from a year earlier, below the 3.5 percent to 4 percent pace that occurred the last time unemployment was this low.