April posts 165K jobs
WASHINGTON -- Employers added a surprising 165,000 new jobs in April, helping to push down the unemployment rate to a four-year low of 7.5 percent, the government said Friday in a report that included sharp improvements to prior months.
"The jobs report was a pleasant surprise. Job growth is slowing, but not as much as feared," said Mark Zandi, chief economist for forecaster Moody's Analytics. "The decline in unemployment is also encouraging, particularly because it was driven by an increase in jobs."
There were few blemishes in Friday's jobs report, as it showed job growth in most sectors with only government and construction hiring in decline. Temporary hiring, often a harbinger of future full-time positions, was up sharply for the month, at almost 31,000 positions. The leading gainer was professional and business services, a category that reflects better-paying white-collar jobs.
Retailers added more than 30,000 jobs for the month and, coming on top of strong readings of consumer confidence and healthy auto sales, the report Friday amounted to a reason to exhale relief.
"Finally some reassuring news on jobs and the economy," Jack Kleinhenz, chief economist for the National Retail Federation, said in a statement. "Today's solid employment news combined with positive March revisions may bode well for the broader economy and portend steady retail sales in April."
Friday's report included upward revisions to February and March numbers, which are now said to have been 114,000 jobs stronger than first thought.
It all combined to send stocks soaring on Wall Street in early trading. The Dow Jones industrial average soared more than 155 points in the first half-hour of trading and, within an hour, had crossed the psychological barrier of 15000. Since stock prices tend to reflect expectations about the economy six months ahead, the recent spate of improving economic indicators points to a continued bull market that pulls in more investors.
"As the market grinds higher, we think there are a lot of investors who feel they are underweight and worry that they are being left behind," said Richard Slinn, an investment specialist for JP Morgan Private Bank, which manages investments for wealthy clientele.
February's estimate of 268,000 jobs was revised up to 332,000, a solid number that is sure to spark argument about the effects of the government budget sequester that began the following month.
March estimates also were revised upward, from the dismal 88,000 to a healthier but still subpar 138,000 jobs for the first month when across-the-board cuts in federal spending began.
"It suggests the labor market is still improving and is helping to sustain consumer spending and housing market advances. However, there is little sign in these data to suggest that a marked acceleration in monthly job creation in the months ahead is in the cards," cautioned Scott Anderson, chief economist for the Bank of the West in San Francisco. "The lack of manufacturing jobs could signal a slowdown in service job growth in the months ahead if the manufacturing sector continues to cool. Equity prices are advancing as traders breathe a little easier that the sky is not yet falling on the U.S. economic expansion."
Despite the numbers, the head of the White House Council of Economic Advisers warned in his blog that the automatic budget cuts will continue to do harm in the months ahead.
"Now is not the time for Washington to impose self-inflicted wounds on the economy," wrote Alan Krueger. "The administration continues to urge Congress to replace the sequester with balanced deficit reduction."
Faced with an improving jobs outlook, Republicans offered a muted response.
"Today's jobs report showed some signs of hope for the thousands of people who found a job in April. However, this growth is way behind our nation's potential," House Majority Leader Rep. Eric Cantor, R-Va., said in a statement. "We must focus on job creation more than one day a month."
There was slight improvement in some problem areas as long-term unemployment, which fell by 258,000 posts to a still-high 4.4 million. As a percentage of the unemployed, this number fell by 2.2 percentage points and now reflects 37.4 percent of all those classified as unemployed.
Additionally, after shrinking for three consecutive months, the size of the labor force increased by 210,000 workers in April, suggesting that hiring helped bring down the jobless rate by a tenth of a percentage point during the month, to 7.5 percent. About 11.7 million Americans were counted as unemployed in April.
There was a warning sign deep within Friday's report, though.
"The only blemish was the outsized decline in hours worked per week. The decline was especially large in retail, leisure and hospitality and construction. This suggests that small businesses are putting more workers into part-time jobs to avoid the impact of health-care reform," Zandi said.
Giving weight to that concern, the number of people who reported to the Labor Department that they were working part-time but wanted full-time employment increased in April by 278,000, to 7.9 million Americans.