The Fed raised rates by a quarter of a percentage point in March and has forecast two more increases this year. That's the lowest unemployment number since May 2007.
That broader measure has been cited by President Donald Trump and his advisers as a more accurate gauge of the job market's health than the unemployment rate. The sector lost 32,000 jobs in the same two months previous year. Over the year, average hourly earnings have risen by 65 cents, or 2.5 percent, the Labor Department reported.
However, central bank also said it viewed "the slowing in growth during the first quarter as likely to be transitory" and still expected economic activity to "expand at a moderate pace". Payrolls this year have expanded similarly to the strong rate recorded since 2011. In the absence of faster wage growth, consumers have retained a healthy outlook as they have largely put aside savings from income gains, including stronger stock and housing prices. We've seen that pattern before: in the late 1990s, which not coincidentally is the last time the USA saw a sustained period of income growth for people up and down the earnings ladder.
The latest jobs report was the first major batch of economic data for the second quarter of the year and indicated that economists are correct in forecasting a rebound in growth. The Federal Reserve and other economists project overall growth in 2017 to settle near 2%. But although most economists think the labor market is at, or approaching, full employment, trouble spots remain.
Information for this article was contributed by Christopher S. Rugaber and Josh Boak of The Associated Press; by Michelle Jamrisko of Bloomberg News; by Patricia Cohen of The New York Times; and by Jim Puzzanghera of the Los Angeles Times.
The labor-force participation rate in April ticked down to 62.9% from 63% in March. Monthly revisions result from additional reports received from businesses since the last published estimates and from the recalculation of seasonal factors. This, by the way, is the lowest level for the metric in about ten years.
The rate, designated U-6, averaged 8.3% in the two years before the recession.
The job gains were broad-based, with hefty increases in leisure and hospitality, health care and social assistance as well as business and professional services.
Total private employment, which excludes government agencies, climbed 194,000, following a 77,000 advance in March.
The unemployment rate, which is calculated from a different survey, fell to 4.4% from 4.5%, the Labor Department said Friday. It could also weaken its case for another interest rate increase as soon as June.
"Despite the decline in unemployment, this report is unlikely to encourage the (Bank of Canada) to change its dovish tone on the outlook for the economy and Canadian monetary policy", Dolega said in a research note.