AILSA CHANG, HOST:
New numbers came out today showing unemployment last month fell to 3.6%. Or as President Trump put it...
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PRESIDENT DONALD TRUMP: The economy is unbelievable.
CHANG: It is certainly good news for a White House that's been on the defensive for weeks because of the Mueller report.
AUDIE CORNISH, HOST:
Meanwhile, a host of Democratic candidates are crisscrossing the country saying they're the ones who will fight for the middle class.
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JOE BIDEN: The country wasn't built by Wall Street bankers, CEOs and hedge fund managers.
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BERNIE SANDERS: Many people watching this program are working two or three jobs just to pay the bills.
KAMALA HARRIS: Middle-class working families in America today are losing.
CORNISH: We're going to get to the politics of all this in a moment. But first, NPR's Jim Zarroli is going to take us back to the time when this was the hottest new tune.
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SLY AND THE FAMILY STONE: (Singing) I am everyday people.
CORNISH: Jim, an unexpected start to my economic interview...
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CORNISH: ...Why are we playing this song?
JIM ZARROLI, BYLINE: 'Cause the unemployment rate in April was groovy. It was 3.6%. That's the lowest it's been since December 1969. There were 263,000 jobs created during the month, so the job market is now as good as it was when Neil Armstrong walked on the moon. I spoke to Austan Goolsbee, who chaired the Council of Economic Advisers under President Obama. He says you can't really compare the job market today to the job market 50 years ago. The labor force is different. We have a lot more retirees today, a lot more women in the workforce.
AUSTAN GOOLSBEE: So it can be hard to compare across decades. But however you want to measure it, it's still very low. And the job market has been strongly improving for many years now, and it has continued. And that's great.
CORNISH: At the same time, it was just a few months ago when it seemed like the economy was slowing down, right? I mean...
ZARROLI: Yeah.
CORNISH: ...The stock market fell towards the end of last year. Does this jobs report, the April jobs report, mean things are better than they appeared?
ZARROLI: I think it probably means that concerns were kind of overblown. I mean, there have been two big issues - economic issues to worry about. One is that the impact of last year's big tax cuts has been fading. You know, they stimulated a lot of short-term spending, and then they kind of petered out. The other big problem was a slowdown in Europe and Asia, which sooner or later affects the U.S. economy.
So if you talk to most economists now, they will say those are still problems. The growth rate is slowing. It was 3.2% in the first quarter of this year, probably down to about 2% now. But it is not slowing as much as we thought.
CORNISH: People also used to talk about wages a lot. Now that the unemployment rate is falling, is there evidence that that's affecting how much workers get paid?
ZARROLI: Yeah, there actually is. I mean, this has been an issue for a while. The unemployment rate has been kind of creeping lower for, like, a decade. But that didn't really seem to be affecting people's wages, and a lot of economists didn't know what to make of that. You know, if workers were becoming scarce, why weren't employers paying more?
We are now finally starting to see pay rising. Average hourly earnings are up about 3.2%, which is higher than the rate of inflation, which means, you know, overall, average workers are finally starting to come out ahead. And that includes people at the lower end of the pay scale. I spoke with economist Ben Herzon at Macroeconomic Advisers, and here's what he said.
BEN HERZON: The big picture there is that labor markets have tightened, and so businesses don't have a choice but to raise wages at the rates that we've seen to attract the labor that they need.
CORNISH: Before I let you go, any red flags in this jobs report?
ZARROLI: Yeah. We saw the unemployment rate fall to 3.6%, which is very low. Now, there are two ways unemployment falls. One is more people get hired; the other is people stop looking for work. And these numbers tell us that the latter happened. The rate of what we call labor force participation fell. People fell out of the labor force. This is kind of at odds with the very good numbers that we saw otherwise. Economist Austan Goolsbee says it may be something of an aberration.
GOOLSBEE: So let's hope that that was just a blip. But that's at least a tiny bit of caution light in what is otherwise, as they say, a nice, fat, juicy jobs number report.
ZARROLI: So this is just something - the labor force participation rate is something that's worth looking at in the months to come.
CORNISH: That's NPR's Jim Zarroli. Thank you.
ZARROLI: You're welcome. Transcript provided by NPR, Copyright NPR.
