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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 6:22 PM
Updated: Jun 1, 2018 6:22 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.

Minnesota Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 97638

Reported Deaths: 2067
CountyConfirmedDeaths
Hennepin27372932
Ramsey11088322
Dakota7635126
Anoka6238137
Stearns407724
Washington388355
Scott262533
Olmsted251928
Nobles197716
Blue Earth17266
Wright16957
St. Louis165941
Carver14377
Clay141741
Rice13438
Mower13425
Sherburne116914
Kandiyohi10552
Winona91318
Lyon7224
Waseca6898
Benton5603
Crow Wing55518
Steele5552
Freeborn5464
Nicollet54517
Watonwan5304
Chisago5131
Todd5042
McLeod5012
Le Sueur4744
Otter Tail4624
Beltrami4505
Martin43010
Goodhue3829
Itasca34715
Pine3430
Douglas3372
Polk3224
Isanti3151
Becker2812
Carlton2761
Morrison2682
Dodge2570
Pipestone23210
Cottonwood2280
Chippewa2231
Meeker2132
Wabasha2020
Sibley1993
Brown1962
Yellow Medicine1902
Cass1844
Redwood1773
Rock1760
Murray1722
Mille Lacs1693
Renville1578
Unassigned15452
Jackson1491
Faribault1470
Swift1441
Fillmore1330
Houston1280
Kanabec1278
Roseau1250
Koochiching1233
Pennington1201
Hubbard1171
Lincoln1160
Stevens1041
Pope990
Aitkin831
Big Stone830
Wadena720
Wilkin703
Lac qui Parle651
Grant634
Lake600
Norman540
Marshall531
Mahnomen491
Red Lake451
Traverse340
Clearwater280
Lake of the Woods231
Kittson120
Cook60

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 86860

Reported Deaths: 1315
CountyConfirmedDeaths
Polk16010262
Woodbury555467
Johnson517027
Black Hawk450990
Linn4101113
Story346217
Dubuque333241
Scott304528
Dallas280738
Pottawattamie215939
Buena Vista199912
Marshall179134
Sioux16803
Wapello134057
Webster128014
Plymouth116121
Clinton113021
Muscatine112155
Crawford11005
Cerro Gordo105921
Warren9666
Jasper86432
Des Moines8008
Marion7697
Henry7554
Tama73932
Carroll6855
Lee6437
Wright5961
Dickinson5306
Boone5178
Bremer5027
Washington47211
Louisa43115
Delaware4233
Mahaska41519
Floyd3543
Jackson3523
Franklin35118
Lyon3514
Winneshiek3406
Clay3344
Hamilton3323
Benton3281
Winnebago31713
Hardin3071
Poweshiek3078
Buchanan2861
Jones2843
Kossuth2800
Butler2752
Emmet27010
Clarke2683
Shelby2681
Allamakee2666
Chickasaw2661
Sac2650
Clayton2633
Cherokee2552
Cedar2521
Guthrie2527
Harrison2523
Fayette2312
Madison2272
Grundy2243
Iowa2161
Palo Alto2050
Hancock1952
Howard1927
Humboldt1913
Mitchell1910
Calhoun1873
Mills1831
Page1710
Cass1692
Osceola1690
Pocahontas1652
Monona1601
Monroe16011
Lucas1566
Appanoose1423
Jefferson1391
Union1383
Taylor1321
Davis1274
Ida1261
Fremont1210
Van Buren1151
Keokuk1141
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Greene1030
Montgomery975
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