"There's what appears to be hesitancy on the part of employers to raise wages", Cathy Barrera, chief economist for ZipRecruiter, told MoneyWatch Thursday. We don't want the inflation rate getting out of control.
In April, for example, the economy added a slightly worse-than-expected 164,000 jobs, but over the last three months it's still averaging a robust 208,000. Most of last month's job gains came in professional and business services, manufacturing, healthcare, and mining.
Goods-producing employment rose by 49,000 jobs during the month, as gains in manufacturing led by adding 24,000.
Although many employers now say it's hard to find qualified workers, they have yet to significantly bump up pay in most industries. That number was 81.4 percent the last time the unemployment rate was at its current levels in December 2000.
Troy Knutson, a founder of the company, said he offers $15 an hour to new employees, who are usually trained on the job how to haul cable and install networks. The rate had been at 4.1% for the past six months.
The unemployment for women dropped to 3.5 percent in April, while the jobless rates for men, teens, whites, blacks, Asians and Hispanics remained unchanged.
Average hourly wages ticked up 4 cents in April. U.S. Treasury yields were little changed after dropping to multi-week lows.
Besides the impact on wages, another reason it's useful to understand the definition of full employment is because maintaining it is one of the Federal Reserve's key mandates when setting interest rates.
"Great!" Trump tweeted Friday.
Today's report is very encouraging.
It might be that 4 percent unemployment is the new 5 percent unemployment: good, but not good enough.
"I hear my clients saying the tax bill gave them more confidence in the pro-business economy", said Tom Gimbel, CEO of search firm LaSalle Network.
A help wanted sign is posted at a taco stand in Solana Beach, California, U.S., July 17, 2017.
The drop in the rate for April also meant that the total size of the labor force was not increasing, making it harder to find workers and potentially spurring inflation. Wells Fargo predicted a 0.2% increase in April's wages, which would keep the annual rate at about 2.7%. Since then, though, it's only 2 percent. The year-over-year increase in the monthly average is +13.0%.
The overall job gains for February and March also were revised upward by a total of 30,000 jobs.
The Fed hiked rates in March and has forecast at least two more increases for 2018. But 410,000 Americans exited the workforce, sending both the labor force participation rate and employment-to-population ratio down by 0.1 percent. This 91-month expansion has made it the longest span of job growth on record.
Some 236,000 U.S. workers left the workforce in April, which the Wall Street Journal suggests is the catalyst for the low unemployment headline number. Nursing-care facilities continue to drive those losses, shedding 2,700 jobs. "Analysts have been expecting wages to rise more rapidly, as the number of available workers shrinks".