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Jobs report: Employment growing, but paychecks not so much

The U.S. economy continued to put Americans back to work last month. But the pace of job growth slowed, and the fastest hiring is coming from some of the worst-paying industries.

The nation's nonfarm payrolls expanded by an estimated 160,000 jobs last month, the smallest gain since September and less than the average monthly pace of 200,000 jobs a month in the first quarter of 2016.

The number missed estimates. Economists polled by Reuters had forecast payrolls rising by 202,000 in April. The latest report showed the jobless rate unchanged at 5 percent.

That's a big improvement from the 10 percent peak of unemployment in the depths of the Great Recession. Seven years after the recession ended, roughly 14 million new jobs have been created, and some 200,000 new paychecks are being produced each month. First-time applications for unemployment benefits are at their lowest levels since 1973.

But over the past 12 months, some of fastest job growth has been coming from some of the lowest-paying industries.

At the same time, growth has slowed in higher-wage industries. Last month, mining payrolls fell 7,000, extending losses from the drop in oil prices. Mining employment has dropped by 191,000 jobs since peaking in September 2014, with 75 percent of the losses in support activities.

Gains in construction employment slowed sharply in April, with just 1,000 net new jobs added, after signs that homebuilding may be decelerating.

Wage gains have also been slower for those with the lowest-paying jobs.

Since 2005, the median weekly wage for all workers has risen to $872, a gain of $176, according to the latest government data. For those with an advanced degree, the median wage rose during that period to $1,445 a week, up $269. Those with less than a high school degree saw their weekly pay rise to $502, a gain of only $98.

That means that strong growth in low-paying jobs will continue to suppress overall wage growth. It may also help explain why consumer spending, which typically makes up some two-thirds of the U.S. economy, has been sluggish.

The government recently reported that overall economic growth slowed from 2 percent in the third quarter to 1.4 percent in the fourth quarter, and just 0.5 percent in the first three months of this year.

It's not clear whether the slowdown is a temporary pause or a sign that the job market may also begin slowing along with it.

The pace of job and wage gains remains a major focus of Federal Reserve policymakers as they continue to debate whether, and how rapidly, to raise interest rates. With inflation running below the central bankers' target rate of 2 percent, a pickup in wages could signal that inflation may be headed higher.

Correction: Mining payrolls fell 7,000 in April. An earlier version misstated the figure.