Total nonfarm payroll employment increased by 263,000 in April, and the unemployment rate declined to 3.6 percent, the lowest rate since December 1969, reported the U.S. Bureau of Labor Statistics. Over the month, the number of unemployed persons decreased by 387,000 to 5.8 million.
Notable job gains occurred in professional and business services, construction, healthcare, and social assistance.
“This summer will mark the longest recovery period in history. The economy kept this healthy pace with the addition of 263,000 new jobs in April 2019,” said Elizabeth Norton, managing research director at Transwestern. “Since the start of 2019, the economy has added on average 205,000 jobs, which is enough to keep the economy humming and advancing forward. The unemployment rate, now at 3.6 percent, is a new 50-year low and indicates a tight labor market, which is prompting companies to boost pay, as the average hourly rate increased 3.2 percent over the year. The number of job openings has outpaced the number of people looking for work, an indicator of a tight labor market. However, this could also indicate a potential skills mismatch, a growing concern for several companies. This mismatch could slow hiring during the balance of 2019, as finding and hiring talent becomes increasingly challenging.”
In April, construction employment rose by 33,000, with gains in nonresidential specialty trade contractors (up 22,000) and in heavy and civil engineering construction (up 10,000). Construction has added 256,000 jobs over the past 12 months. Most recent figures show new construction that started in March advanced 16 percent from the previous month to a seasonally adjusted annual rate of $809.2 billion, according to Dodge Data & Analytics.
The substantial gain in construction starts followed a lackluster performance during the first two months of 2019, as total construction starts in March were able to climb back to a level slightly above the average monthly pace during 2018. The nonbuilding construction sector, comprising public works and electric utilities/gas plants, jumped 40 percent in March from a weak February, lifted by the start of a $4.3 billion liquefied natural gas export terminal in Cameron, La.
Nonresidential building increased 24 percent in March, aided by groundbreaking for several large projects. These included the $1.6 billion Toyota-Mazda automotive manufacturing facility in Huntsville, Ala.; a $1.1 billion hotel and theater redevelopment in New York; and the $850 million renovation of the KeyArena in Seattle.
The retail employment sector showed little change but continued to decline (down 12,000 jobs). Job losses occurred in general merchandise stores (down 9,000) as retailers continued to file for bankruptcy. So far in 2019, 10 major retailers have filed for Chapter 11 protection. The biggest by far in terms of store count, Payless ShoeSource, is in the process of liquidating all 2,100 of its remaining U.S. stores (along with its Canadian business). Another retailer, Diesel USA, which filed for bankruptcy last month, hopes to try to turn around the brand through a three-year reorganization. Others include Beauty Brands, Charlotte Russe, FullBeauty Brands, Gymboree, Innovative Mattress Solutions, Shopko, Things Remembered, and Z Gallerie.
The pain for the retail sector may not let up soon, as e-commerce will force approximately 75,000 U.S. stores to go out of business by 2026, according to data from UBS. It finds with each 1 percent increase in online penetration, some 8,000 to 8,500 stores will need to close.