Jobless rate under 4%, first since 2000

WASHINGTON — The U.S. labor market improved somewhat last month, adding a solid 164,000 net jobs while the unemployment rate reached a new milestone, falling below 4 percent for the first time since 2000, the Labor Department said Friday.

But while job growth rebounded from a disappointing March figure, revised up Friday to 135,000, other aspects of the closely watched monthly report were lackluster.

And the drop in the unemployment rate was for a bad reason: The labor force shrank for the second month in a row.

Overall, the data show a labor market that remains resilient in the face of a potential global trade war, but whose growth is slowing as the recovery from the Great Recession this month became the second-longest in U.S. history.

“This jobs report is truly a mixed bag,” said Mark Hamrick, senior economic analyst at financial information website Bankrate.com.

The April job gains were below analyst expectations of about 195,000.

But with upward revisions of 30,000 for February and March, job growth has averaged 200,000 a month this year — well above what’s needed to accommodate new entrants to the workforce

The 3.9 percent unemployment rate in April set a new post-recession low.

The unemployment rates for blacks and Latinos last month — 6.6 percent and 4.8 percent, respectively — were at their lowest levels since the Labor Department began tracking the figures in the early 1970s.

President Donald Trump touted the decline in the overall rate Friday.

“I thought the jobs report was very good. The big thing to me was cracking 4 (percent). That hasn’t been done in a long time,” Trump told reporters before departing the White House for a speech in Texas. “We’re (at) full employment. We’re doing great.”

But the reason the unemployment rate dropped from 4.1 percent in March was because the labor force

shrank by 236,000 people.

“That’s not good news,” said economist Douglas Holtz-Eakin, president of the conservative-leaning American Action Forum think tank.

While he acknowledged there was symbolism in breaking 4 percent, HoltzEakin said it would be a positive development if the rate went down while the labor force was growing.

“It’s that horse race between jobs created and the (size of the) labor force, and we went the wrong way this time,” he said.

Overall, he said he would grade the jobs report “a B in a world where we’d really like to see an A-plus.”

In the 2016 presidential campaign, Trump disparaged government reports of a falling unemployment rate as understating the condition of the jobs market because so many Americans were not in the labor force.

Wage growth, which economists have said should pick up as the labor market tightens, slowed in April, a discouraging sign for workers. Average hourly earnings increased 4 cents in April to $26.84 after a 6-cent increase in March. Still, annual wage growth held steady at 2.6 percent for the 12-month period that ended April 30.