MARY REICHARD, HOST: Today is Monday, May 7th. Thank you for turning to WORLD Radio to help start your day. Good morning. I’m Mary Reichard.
NICK EICHER, HOST: And I’m Nick Eicher.
Coming next on The World and Everything in It, the Monday Moneybeat.
HAMRICK: The economy remains on track, it’s not going off the rails, but it’s also not as robust as had been hoped or perhaps even promised, and there are a number of rising uncertainties, not the least of which are related to trade tensions.
Mark Hamrick, senior economic analyst, Bankrate.com.
He’s pointing to a new jobs report for April from the Labor Department.
The headline number is that the rate of unemployment fell below 4, to 3.9 percent. It hasn’t been that low since December 2000. And if you look back eight years ago, the jobless rate had hit 10 percent.
Employers added 164,000 new jobs in April. It’s the 91st straight month of growth in hiring.
But, good as all that sounds, three factors temper the news a bit.
The 164,000 jobs is less than expected, because for the first three months of the year, new jobs had averaged over 200,000. That’s first.
Second, the reason the unemployment rate ticked down was because the pool of job-seekers declined. The macroeconomic term for that is the labor force participation rate, and it went down.
And third, wages are still not growing as fast as economists expect when jobs are this plentiful. Average hourly earnings have risen 2.6 percent from a year ago.
That said, the president of the San Francisco Federal Reserve Bank says there are more reasons for optimism than pessimism. John Williams on CNBC last week.
WILLIAMS: Job growth has been very solid over the last three, four months. Unemployment did come down, which we’ve been expecting. Wage growth is, is still, I think, on an upward trend, but it’s not picking up fast. Overall, I think it’s a positive report in the sense of the U.S. economy is still on a good growth trajectory. I feel this is a pretty much a goldilocks economy.
Meaning, not too hot, not too cold. Just right.
REICHARD: One of America’s biggest banks has proposed paying out nearly half-a-billion-dollars to settle shareholder lawsuits. Wells Fargo denies allegations that the bank misstated or failed to disclose details about its sales practices. But the proposed $480 million payout would settle claims that it did. Last month, the government fined Wells Fargo $1 billion for misbehavior in its auto and mortgage businesses. About the shareholder suits, Wells Fargo says it’s settling to avoid the cost and disruption of further litigation. The settlement still has to be approved by a federal court.
EICHER: If California were a country, its economy would be the fifth largest in the world. The Golden State’s economic output just surpassed that of the United Kingdom, and that’s according to new federal data made public on Friday. California’s gross domestic product rose by $127 billion from 2016 to 2017, growing to more than $2.7 trillion. Meanwhile, the UK’s economic output shrunk slightly over that time.
On Wall Street, a Friday rally helped all the major stock indexes. It propelled the Nasdaq and the Russell 2000 to a winning week. For the Dow Jones Industrial Average and the Standard & Poor’s 500, the rally softened the blow of a losing week.
REICHARD: So here are the numbers for the week: The Dow and the S&P 500 both fell 2/10s of a percent. The Russell 2000 index of small-company stocks advanced 0.6 percent, and the tech-heavy Nasdaq rose 1.3 percent.
EICHER: And that’s this week’s Monday Moneybeat.
EDITOR’S NOTE: This post has been updated to remove the inaccurate statement, “U.S. dollars are more valuable than British pounds.” They are not.