WASHINGTON (AP) â€” The surging economy pushed the nation's unemployment rate down to a three-decade low of 3.9 percent in April as 340,000 workers found jobs. The jobless rates for blacks and Hispanics plunged to record monthly lows.
The bigger-than-expected drop in the jobless rate followed a 4.1 percent rate in March, the Labor Department said today.
Many analysts were expecting April's unemployment rate to fall to 4 percent. April's rate was the lowest since January 1970, when it also stood at 3.9 percent.
``This is a happy day for the people of the United States,'' President Clinton said today, pausing to comment as he left the White House for a Democratic retreat in Pennsylvania. ``Most Americans have never lived in a peacetime economy with unemployment as low as it is today.''
Now in its longest-ever streak of uninterrupted growth, the record-breaking economy is keeping unemployment down to low levels most workers haven't seen since they took their first jobs.
The unemployment rate for blacks fell to an all-time monthly low of 7.2 percent from the previous low of 7.3 percent set in March. The rate for Hispanics dropped to a record low of 5.4 percent surpassing the previous low of 5.6 percent in January.
The Fed has bumped up interest rates five times by a quarter-point each since June 30 in an effort to slow the red-hot economy and keep inflation under control.
Given the outlook for strong continuing growth, many analysts widely expect the central bank will push rates higher at its next meeting on May 16. Today's report increases the odds that the Fed will move rates up by a more aggressive half-point, economists said.
``I don't know why the Fed would not go with a 50 basis point increase now that there's a smoking gun on inflation clearly in view,'' said Paul Kasriel, chief economist with Northern Trust Co, referring to strong wage growth in today's unemployment report along with other recent economic data showing rising wage and inflation pressures.
On Wall Street, stocks rose in early trading as investors shrugged off the stronger-than-expected employment report. The Dow Jones industrial average was up around 96 points and the Nasdaq up 77 points. But bonds continued to lose ground on fears that the Fed will push up rates more aggressively to slow the speeding economy.
The 340,000 jobs added to business payrolls in April was stronger than the 315,000 jobs many analysts expected.
The hiring of 73,000 temporary census workers was a big factor in boosting payrolls, government analysts said. Excluding the census hiring, employment would have grown by a more modest 267,000, those analysts said.
Many economists also believed that the late Easter holiday was a factor in boosting job growth by pushing some hiring, mostly retail, into April.
In March, a whopping 458,000 jobs were created â€” more than the government previously estimated â€” helped along by a longer-than-normal survey period that allowed more jobs to be counted and a big burst in hiring for the census.
Average hourly earnings, a key gauge of inflation pressures, in April rose twice as fast as many analysts were predicting. Average hourly earning went up by 0.4 percent to $13.64. Many analysts were forecasting a 0.2 percent rise. In March, wages grew by 0.3 percent, slightly less than the government reported one month ago.
While strong job and wage growth is good for workers, economists and members of the Federal Reserve worry that the combination might worsen inflation. Their shared concern: employers scrambling to find scarce workers, recruit them with big boosts in wages and benefits, increased costs that could be passed along to consumers as higher prices.
On Thursday, the government reported that unit labor costs, a sign of inflation pressures, rose a bigger-than-expected 1.8 percent in the first three months of this year, while workers' productivity slowed.
And, a survey by the Federal Reserve released Wednesday said employers, trying to attract scarce workers in March and early April, were under increasing pressure to raise wages, even though consumer prices, for the most part, were well-behaved.
In April, the service sector, the driving force of job creation in the United States, led the way in job growth as 380,000 workers were hired.
Retailers added 119,000 jobs with most of the gain in hiring at bars and restaurants. Employment also rose substantially at food stores.
Business services, which includes a wide range of activities, added 121,00 jobs with employment at hotels and other lodging places growing considerably for the second straight month.
Even manufacturing, which lost around 248,000 jobs last year, created jobs in April, adding 11,000 workers. But construction companies lost 55,000 jobs in April.
Manufacturers continue to recover form the effects of a global financial crisis that struck in 1997, depressing overseas' demand for U.S. goods.