Unemployment rate matches lowest point in half a century

How low can we go?The jobless rate ticked down to 3.8% in May, another sign of the strong economy and tight la...

Posted: Jun 1, 2018 7:22 PM
Updated: Jun 1, 2018 7:22 PM

How low can we go?

The jobless rate ticked down to 3.8% in May, another sign of the strong economy and tight labor market.

That tied the lowest unemployment rate since 1969. Since then, the only other time unemployment was this low was in April 2000.

"It fell for all the right reasons. We had more people coming into the labor market. We saw employers digging deeper into the pool of unemployed," said Josh Wright, chief economist at the software firm iCIMS.

The jobs report painted a picture of an economy with opportunities for almost everyone. Black unemployment fell to a record low, and the gap between black and white unemployment shrank to the narrowest ever measured.

Job openings are at a record high, and businesses are hungry for workers. That has helped underrepresented Americans find jobs.

The unemployment rate among African-Americans and Asian-Americans has been steadily declining. It has also dropped among low-education workers and even teenagers. Over the past year, the unemployment rate among 16- to 19-year-olds has fallen from 14.1% to 12.8%.

Related: Black unemployment rate hits a record low

Economists believe that the unemployment rate can dip even further because there's still slack in the job market.

The employed percentage of America's population stands at 60.4%, still well below pre-recession levels.

Despite questions about employers' ability to find qualified workers, the economy added 223,000 jobs in May, better than economists predicted.

Job gains were broad. The retail, health care and construction sectors added the most positions. The economy has added 207,000 jobs a month this year on average, a faster pace than last year.

"The US economy has this incredible head of steam," Wright said.

The economy has been expanding for almost nine years, the second-longest streak on record. And employers have added jobs every month for seven and a half years, a record.

Modest wage growth remains the great puzzle in the economy. Wages are 2.7% higher than a year earlier.

Although wage growth has picked up in recent months, economists have been puzzled for a long time about why pay isn't climbing faster. In a job market this tight, employers are typically forced to pay much more to attract workers. In 2000, the last time unemployment was this low, wages grew at a pace of about 4%.

Productivity and inflation are lower than in previous periods of growth, and economists believe that has kept a lid on wages. The erosion of workers' bargaining power has also played a role.

Another explanation: Employers are turning to new workers - such as younger people and those just re-entering the job market - to fill positions vacated by better-paid veteran workers who are either retiring or taking new positions elsewhere.

Economists are confident that wages will keep climbing as competition for workers grows.

Dozens of companies have already announced pay hikes and more attractive benefits to lure workers. On Thursday, Costco said it would raise starting wages for US employees by $1, to a minimum of $14 an hour.

Related: Trump hints at strong jobs report ahead of its release

A little more than an hour before the jobs report was released, President Trump broke with precedent by saying on Twitter, "Looking forward to seeing the employment numbers at 8:30 this morning."

Trump's tweet seemed to move the markets. Bond yields jumped almost immediately, and the dollar moved higher.

The jobs report is kept under wraps until the Labor Department publishes it at 8:30 a.m. ET, in part so investors can't get a jump on the data before it becomes public.

A federal rule says executive branch employees are not supposed to comment on major economic reports until an hour after they are released.

"Trump's tweet clearly violated prior norms of practice. For markets to do their best work, they need clear rules of the road to ensure fair competition and invite broad participation," Wright said.

Terre Haute
Cloudy
73° wxIcon
Hi: 73° Lo: 73°
Feels Like: 73°
Robinson
Cloudy
73° wxIcon
Hi: 74° Lo: 70°
Feels Like: 73°
Indianapolis
Cloudy
76° wxIcon
Hi: 76° Lo: 73°
Feels Like: 76°
Rockville
Cloudy
71° wxIcon
Hi: 73° Lo: 72°
Feels Like: 71°
Casey
Cloudy
73° wxIcon
Hi: 72° Lo: 70°
Feels Like: 73°
Brazil
Cloudy
73° wxIcon
Hi: 76° Lo: 73°
Feels Like: 73°
Marshall
Cloudy
73° wxIcon
Hi: 72° Lo: 71°
Feels Like: 73°
Showers early today!
WTHI Planner
WTHI Temps
WTHI Radar

WTHI Events

 

Illinois Coronavirus Cases

(Widget updates once daily at 7 p.m. CT)

Cases: 1388634

Reported Deaths: 25566
CountyCasesDeaths
Cook55620110461
DuPage923681316
Will769181032
Lake683491014
Kane59419807
Winnebago34106506
Madison30930526
McHenry29182294
St. Clair28316519
Peoria23443342
Champaign21100154
Sangamon19094240
McLean18553187
Tazewell17227305
Rock Island15245329
Kankakee14550217
Kendall1327899
LaSalle12779250
Macon10997211
DeKalb10116121
Vermilion10021142
Adams8677126
Williamson7595134
Whiteside7199174
Boone683677
Ogle620683
Grundy598678
Clinton578991
Coles5770100
Knox5642153
Jackson510065
Henry507870
Livingston489691
Woodford483282
Stephenson481985
Macoupin478288
Effingham476872
Franklin454178
Marion4513117
Jefferson4422122
Monroe438094
Lee419354
Randolph416487
Fulton405159
Logan396964
Morgan393482
Christian383875
Montgomery379474
Bureau378383
Fayette322555
Perry320360
Iroquois313867
McDonough290851
Jersey271652
Douglas260636
Saline260357
Lawrence241127
Shelby232638
Union228141
Crawford214525
Bond208724
Cass203527
Ford188948
Warren184148
Clark183733
Jo Daviess182724
Pike181853
Wayne181053
Hancock180631
Carroll178337
Richland176940
Edgar176740
White170626
Washington164825
Moultrie163128
De Witt157229
Mason154145
Piatt152414
Clay149643
Mercer149334
Johnson147616
Greene145134
Massac135840
Wabash135612
Cumberland130119
Menard125012
Jasper116718
Marshall108119
Hamilton84215
Schuyler7797
Brown7286
Pulaski7007
Stark64824
Edwards57712
Calhoun5302
Henderson52814
Scott4881
Putnam4863
Alexander47411
Gallatin4694
Hardin39112
Pope3284
Out of IL350
Unassigned02433

Indiana Coronavirus Cases

(Widget updates once daily at 8 p.m. ET)

Cases: 751242

Reported Deaths: 13795
CountyCasesDeaths
Marion1032931788
Lake556911009
Allen41692692
St. Joseph36990565
Hamilton36588417
Elkhart29398461
Tippecanoe22901226
Vanderburgh22556400
Porter19356325
Johnson18471389
Hendricks17682317
Clark13226195
Madison13149344
Vigo12614253
LaPorte12419221
Monroe12207176
Delaware10966198
Howard10321225
Kosciusko9630121
Hancock8576146
Bartholomew8169157
Warrick7860156
Floyd7811180
Grant7242179
Wayne7162201
Boone6966103
Morgan6761141
Dubois6218118
Marshall6209116
Cass6016110
Henry5900110
Dearborn589878
Noble581488
Jackson509076
Shelby501496
Lawrence4742122
Gibson444894
Clinton442355
Harrison441875
DeKalb439885
Montgomery438090
Whitley406543
Huntington402681
Steuben400159
Miami395269
Jasper388054
Knox375991
Putnam372960
Wabash361983
Ripley347170
Adams345555
Jefferson335886
White331953
Daviess3033100
Wells295281
Decatur289992
Greene286885
Fayette284864
Posey273835
LaGrange273072
Scott270156
Clay267148
Washington246036
Randolph244783
Jennings235349
Spencer234531
Starke228058
Fountain220948
Sullivan214643
Owen211858
Fulton202942
Jay200932
Carroll193620
Orange188255
Perry187237
Rush175926
Vermillion174844
Franklin170335
Tipton166246
Parke149416
Pike138234
Blackford136232
Pulaski120647
Newton113936
Brown104243
Crawford102516
Benton101714
Martin91715
Warren84015
Switzerland8148
Union72810
Ohio57911
Unassigned0420