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Jobless Rate at Lowest Level in 30 YearsAired May 5, 2000 - 1:01 p.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
NATALIE ALLEN, CNN ANCHOR: More jobs and higher wages. We learn today from Washington that the U.S. unemployment rate dropped below four percent last month for the first time in 30 years. Among blacks and Hispanics, the jobless rate has never been lower, and earnings? they rose twice as fast as expected.
President Clinton says it is "wonderful news," but economists fear it practically guarantees another hike in interest rates.
We get the story from CNN financial news correspondent Bob Beard at the Labor Department -- Bob.
BOB BEARD, CNN CORRESPONDENT: Yes, hi, Natalie.
The real problem, the real worry now is indeed that the Federal Reserve's call, what they the open market committee will indeed raise interest rates for a sixth time. The sixth time since June when it meets in a week and a half.
You know, from Maine to Hawaii, with this red hot economy, employers went on a spring hiring spree. Payrolls bloomed like an April rose last month. The economy adding 340,000 new jobs, boosted by 73,000 temporary census workers. That sent the unemployment rate below four percent for the first time since January 1970 when Richard Nixon was president, the nation embroiled in the Vietnam War. There are a lot of help wanted signs out across the nation because of very tight labor market.
Economists say the stellar showing of 3.9 percent is as close to full employment as the United States can get.
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BRIAN FABBRI, ECONOMIST: The economic sectors that we're dealing with right now are just absolutely booming and consequently the number of new jobs created, even ex-census, is stronger than it was on average in the first quarter and stronger than it was in 1999. The gains coming across the board in manufacturing and in particular, in retail jobs. Consumers are still flocking in the stores.
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BEARD: And workers in retail jobs, manufacturing, construction made more money in April. Average hourly earnings up 4/10 of a percent to $13.46 an hour. That was expected by Wall Street by the way.
Now the worry is again: a tight labor market and higher wages lead to inflation, because employers might pass on those higher wages in form of higher prices to consumers. That is concern number one for the Federal Reserve.
And while all these numbers are good news indeed for American workers, most economists say they do ensure another increase in interest rates from Alan Greenspan and company. Once again that Fed increase -- excuse me, that Fed meeting comes in a week and a half.
Natalie back to you.
ALLEN: All right, Bob Beard, live from the Labor Department, thanks.
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