US unemployment rate drops to pre-recession low

The US Department of Labor jobs report for April was released today, showing the unemployment rate at the lowest level in a decade.

At 4.4%, unemployment has fallen to a pre-recession low. 211,000 jobs were added to the US economy during April, surpassing the 190,000 estimate made in a Bloomberg survey of economists. The leisure and hospitality sector saw the largest increase, followed by education and health services.

These positive statistics come after a slump in hiring in March, when only 79,000 jobs were added to the labor market, and a dramatically slowed annual growth rate of 0.7% in the first quarter of 2017. Experts put the disappointing March figures partly down to heavy snowstorms in the Northeast, which caused major disruption for the construction and retail industries.

In an article for IZA World of Labor, Daniel Hamermesh discusses trends in the US labor market after the Great Recession. He points out that while the US is now at near full employment, problems such as earnings inequality and rapidly falling labor force participation still persist. The solution, according to Hamermesh, lies with enacting policy to “raise tax rates on households in the upper third of the distribution of household incomes” while “lowering rates on households in the bottom two-thirds.”

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