US unemployment rate drops to 18-year low of 3.8%

The US unemployment rate dropped to 3.8% in May, an 18-year low, as employers added 223,000 jobs.

The number of people unemployed dropped to 6.1 million.

The number of job gains exceeded what economists surveyed by Bloomberg had expected, of 190,000.

Average hourly earnings increased 8 cents to $26.92. The average hourly pay of private sector workers rose by 2.7% in May year-on-year, up from the 2.6% increase in April.

The private sector added 218,000 jobs while the federal, state and local governments added 5000.

Job gains were across all sectors. Retailers added 32,000 jobs, while professional and business services added 31,000 and leisure and hospitality added 21,000. Construction added 25,000 jobs and manufacturing added 18,000.

Unemployment rates have declined across all major demographic groups.

The unemployment rate for blacks dropped to 5.9 percent in May – the lowest level since the government started tracking that data in 1972. Last May the black unemployment rate was 7.6%.

White unemployment dropped from 3.7% a year ago to 3.5% in May.

For Asian-Americans the unemployment rate is 2.1% while the jobless rate for people of Hispanic of Latino ethnicity is 4.9%.

The report was strong all around. So far this year monthly job growth has averaged 207,000, up from 182,000 in 2017.

Some analysts believe that the positive jobs report could drive the US Federal Reserve to hike interest rates at its upcoming meeting later this month.

US President Donald Trump went to Twitter suggesting that the report would be strong. At 7:21 a.m. Friday Trump tweeted: “Looking forward to seeing the employment numbers at 8:30 this morning.”

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