"The labour market has improved solidly with the three month average payroll growth of 238/per month. Over the six months to April, the unemployment rate has fallen 0.4 percentage points to 6.3% while the participation rate has fallen from 63 to 62.8%."
- ANZ research team
The U.S. economy has almost stopped in the first quarter of this year, posting just a 0.1% expansion. Second quarter is likely to show a brighter picture, as a thaw is spreading into all sectors of the economy, including the labour market.
On Friday, a highly anticipated report from the Labor Department showed the U.S. economy added 288,000 in employment in April, posting the biggest gain since January 2012 and following an upwardly revised 203,000 increase a month earlier. The consensus forecast stood at a 218,000 advance, while analysts from Barclays were slightly more upbeat, calling for a 250,000 figure. At the same time, the unemployment rate turned lower to 6.3%, smashing expectations to hit the lowest since November 2008. Although the indicator is still in touch with the previous Fed's target of unemployment, the central bank has abandoned this threshold, turning to a qualitative assessment of the economy. The last time unemployment hit 6.3% was in September 2008. Despite the improvement, the participation rate plunged 0.4% to 62.8%, moving back to December level and showing no signs of an exact trend in the recent months. The economy is gathering momentum after the bad winter. This is clear, however, it is hard to estimate how much time will be needed to restore the earlier lost positions in the economy and how sustainable further expansion will be.
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