ECONOMY

Jobless Rate at 10­Year Low as HiringGrows and Wages RiseBy PATRICIA COHEN MAY 5, 2017

The jobless rate dropped to 4.4 percent in April, the lowest level in more than a

decade, the government said on Friday, signaling the economy’s resilience and

showing a labor market closing in on full capacity.

Employers added 211,000 workers, the Labor Department said, helping to quell

doubts raised by sluggish growth in the first quarter and anemic hiring in March.

The economic anxiety and uneven fortunes that figured so prominently in the presidential campaign have not disappeared, particularly outside of the country’s flourishing urban centers. Wage growth was also modest, with the year­over­year increase staying just baby steps ahead of inflation.

Robert Adams, 52, the department of transportation project manager, walking onto the nearly complete Kosciuszko Bridge between Brooklyn and Queens last month. Credit Jake Naughton for The New York Times

But some of the labor force’s weakest corners improved, with declines in the ranks of discouraged workers and of those working part time who would prefer full-time jobs. The average monthly gain in jobs since February reached 174,000.

“Great news,” Labor Secretary Alexander Acosta said Friday morning on Twitter, adding in a later statement that further work was needed “on bridging the skills gap and on expanding opportunity.”

Republicans were not alone in paying homage to the labor market’s strength.

“The momentum in the job market is really impressive,” said Jason Furman, the chief economic adviser during the Obama administration. “I’m frankly surprised that this late into an expansion the economy is still adding jobs well above the steady­state pace.”

The April figures renewed a conversation among economists about whether the economy was at “full employment,” the point at which everyone who wants a job can get one at the current level of pay.

There was less agreement on who deserved the credit. Republicans crowed about how many jobs had been created since President Trump took office in January, while Democrats pointed to the ongoing economic legacy of President Barack Obama.

Three months is still a short span in the life of an administration, and Mr. Trump has not yet pushed through the main planks of his pro­growth agenda like tax reform or a large investment in infrastructure. Even so, some economists gave the president credit for a jump in optimism.

“Sharp increases in consumer and business confidence can have real consequences that show up in increased hiring and investment,” said Douglas Holtz­Eakin, a former director of the Congressional Budget Office who advised Senator John McCain, Republican of Arizona, during his 2008 presidential campaign.

Mr. Holtz­Eakin added that Mr. Trump’s freezing of new regulations and elimination of others were having a measurable impact.

“The observed pace of regulatory activity has come to a standstill,” he said. In contrast, he argued, a persistent rollout of regulations by the Obama administration had added millions of dollars in costs for businesses each week.

Another major factor in the economy’s performance is, of course, the Federal Reserve Board, which put a confident stamp on the economy this week and plans to raise interest rates further this year.

The jobs report on Friday strengthens that case, though another report is due before Fed policy makers meet again in June. And the wide swing between March’s disappointing jobs growth figure, which was revised to 79,000, and April’s vibrant one was a useful reminder that every monthly jobs report provides only a temporary and incomplete snapshot of the economy.

Whatever effect Mr. Trump’s policies are having so far, economists agree that presidents always tend to be given much more responsibility for the economy’s ups and downs than they deserve. “We have a big, big economy and the overall shape is made by millions and millions of individual decisions,” said Michael Strain, an economist at the American Enterprise Institute, a conservative think tank. “We tend to give too much emphasis to role of the president.”

Certainly, the administration’s solidly pro­business agenda has buoyed many executives. At the same time, they have steadily complained about a growing shortage of workers.

“It’s not an employer’s market,” said Patrick Bass, chief executive of Thyssenkrupp North America, which makes elevators, steel and other industrial products.

Based in Germany, Thyssenkrupp employs more than 15,000 people in the United States, but “the labor market is very competitive at all levels,” Mr. Bass said. “We have more positions open than we’ve been able to fill.”

Yet if shortages were as acute as advertised, then wages would be bid up at a faster rate. Average hourly earnings, though, rose by 0.3 percent in April, bringing the year­over­year growth to 2.5 percent. Last year at this time, increases were the same but inflation was lower, further shrinking the impact of any wage increases.

Employers must decide whether to buy skills or to build them, said Michael Stull, a senior vice president at the staffing company Manpower North America. The small pressure on wages, he said, is evidence that they have been trying to buy them, but more businesses are expressing an interest in partnerships with educational institutions or in developing skills so that new hires “can earn while they learn.”

Workers with fewer skills or less experience can often be hired at a cut rate. Some may have come from the ranks of part-time workers who want full-time jobs and of those who had previously been too discouraged to look. There was a sharp drop last month in the broader measure of unemployment, which includes individuals in both categories, to 8.6 percent from 8.9 percent. That is close to the prerecession rate.

Less encouraging was a dip in the proportion of adults who have a job or want one. That measure, known as the labor participation rate, edged down to 62.9 percent last month from 63 percent, a sign that workers who had been sidelined are not being drawn back into the labor market.

“This gets to be the real issue,” said Diane Swonk, founder of DS Economics in Chicago. “As good as this report is, it points to how hard it is to bring in those marginalized workers. With skills erosion, people in long­term unemployment have gotten into a vicious cycle. An incoming tide does not lift all boats.”

And the divisions among Republicans in Washington that have left the future of the Affordable  Care  Act  uncertain  even  after  the House  vote  on  Thursday  to  repeal  it have put some employers in a wait­and­see mode.

Ms. Swonk noted, for example, that while hiring in health care and social-assistance jobs was up by 37,000, the monthly average in the sector was down from last year at the same time. “Health care employment since the beginning of the year is not the driver it once was,” Ms. Swonk said, calling it a “residual of uncertainty regarding health care coverage.”

(The biggest gains were found in the leisure and hospitality sectors. “They’re not buying cars, but they’re buying vacations,” Mr. Swonk said.)

Owners of small and medium-size businesses tell pollsters that they are optimistic about the economy, despite several weak economic indicators, said Catherine Barrera, an economics professor at Cornell University and the chief economic adviser for ZipRecruiter, an online jobs platform. But many employers have yet to act on their stated intentions to add workers. “The thing that stands out most,” Ms. Barrera said, is the “gap between that optimism and the follow­through on that optimism.”

Matthew Dolly, director of research at Transwestern, a national commercial real estate firm, said: “Businesses want to hire and planned on hiring. But until policies are ironed out, hiring will remain stagnant for a bit while that happens.”

Even after a policy is carried out, it can take time before the effect kicks in. When it comes to individual tax cuts, for example, consumers have historically started to spend only when the extra money is in hand, not when it is promised, said William Gale, a senior fellow at the Brookings Institution.

Gauging the impact on businesses is much more complicated.

“We generally think it takes about a decade for the economic effects of a tax plan to fully phase in,” said Kyle Pomerleau, director of federal projects at the conservative Tax Foundation.

And maybe not even then, given how many variables affect investment and the economy, said Alan Viard, a senior fellow at the American Enterprise Institute.

“You might never be able to pin down what happened due to the tax cut, as there would be no way to know what would have happened without the tax cut,” he said. “We can’t observe the path not taken.”

A version of this article appears in print on May 6, 2017, on Page A1 of the New York edition with the headline: Hiring Rise Sends U.S. Jobless Rate To a 10­Year Low.

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