Solid job gains in April ease fears about economy
WASHINGTON – The U.S. economy showed in April that it’s healthier than many had feared, adding a solid 165,000 jobs and driving the unemployment rate down a notch to a four-year low of 7.5 percent.
Not only that, but many more people were hired in February and March than previously thought, the Labor Department said Friday. The job gains came despite a global slowdown, Social Security tax increases and federal spending cuts, which some have thought would drag on the economy.
The stock market soared on the news. The Dow Jones industrial average closed up 142 points, or nearly 1 percent, after briefly breaking 15,000 for the first time in history.
Coming after a poor March jobs report and some recent data showing economic weakness, the figures helped ease fears that U.S. hiring might be slumping for a fourth straight year. The job market is benefiting from a resurgent housing market, rising consumer confidence and the Federal Reserve’s stimulus actions, which have helped lower borrowing costs and lift the stock market.
“Businesses haven’t lost confidence yet,” said Sung Won Sohn, an economist at the Martin Smith School of Business at California State University. “Consumers are feeling better. The decent employment gains will add to the optimism and help lift future spending.”
The Labor Department revised upward its estimate of job gains in February and March by a combined 114,000. It now says employers added 332,000 jobs in February and 138,000 in March.
The economy has created an average of 208,000 jobs a month from November through April – well above the monthly average of 138,000 for the previous six months.
The unemployment rate edged down from 7.6 percent in March and has fallen 0.4 percentage point since the start of the year, though it remains high. The Fed has said it plans to keep short-term interest rates at record lows at least until unemployment falls to 6.5 percent.
One cautionary note in the employment report: Most of the biggest job gains were in lower-paying fields, such as hotels and restaurants, which added 45,000 jobs, and retail, which added 29,000. Temporary-help firms gained 31,000 positions.
By contrast, construction companies and governments cut jobs. Manufacturing employment was flat.
Some higher-paying sectors added workers. Professional and technical services, which include accounting, engineering and architecture, added 23,000 jobs. Education and health services gained 44,000.