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ECONOMIC REPORT, May 2, 2014, 4:08 p.m. EDT, By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — The U.S. added the most jobs in April in more than two years, the latest evidence of a spring revival in the economy that offers hope of faster growth in the months ahead after a tepid first quarter. The unemployment rate also sank to a nearly six-year low of 6.3%.
The economy created 288,000 jobs last month, the Labor Department said Friday, marking the best performance since a 360,000 gain in January 2012. Employment gains for March and February were also revised up by a combined 36,000.
So far in 2014 the U.S. has added an average of 214,000 jobs a month, ahead of the 2013 pace of 194,000.
“The April jobs report was another sign of a spring rebound,” said Avery Shenfeld, economist at CIBC World Markets.
The better-than-expected April employment report sent Treasury yields higher, but U.S. stock markets closed the week with a loss. Economists polled by MarketWatch had expected a 215,000 increase in nonfarm jobs.
The nation’s unemployment rate, meanwhile, dropped to 6.3% from 6.7%. It was the biggest one-month decline in 31 years and put the jobless rate at its lowest level since September 2008.
Yet in an odd twist, the size of the labor force fell by whopping 806,000 despite the apparent willingness of companies to hire more workers. That’s the biggest drop in six months and the second largest decline in 32 years. First Take: The household survey is insane
As a result, the labor-force participation rate sank to 62.8% from 63.2% and matched a 35-year low. The rate measures the percentage of people 16 or older who have or want a job.
Erica Groshen, the Bureau of Labor Statistics commissioner, said the rate mainly fell because far fewer people entered the labor force than usual. Normally the labor force shrinks because people leave the labor force. Read: Seemingly terrific April jobs report poses strange puzzle.
‘Hot-diggity’ and ‘pinch of salt’ — jobs report reactions
The economy was widely expected to show a faster pace of job creation in April, as warmer temperatures induced firms to add workers they might have hired earlier in the year if not for an extremely harsh winter. The poor weather contributed to a meager 0.1% U.S. growth rate in the first quarter.
What’s less clear is if the momentum generated by the switch from winter to spring will continue.
Michael Griffin, executive director at the business consultancy CEB, said barely more than one-third of company executives surveyed by his firm said they plan to hire more workers in the next 12 months. He said companies are “hesitant” about whether economic growth is really accelerating or if the latest upturn is just another false start.
The increase in hiring was widespread , with almost every major industry adding jobs. Professional jobs surged by 75,000, about one-third of them temporary positions. Retailers added 35,000 jobs, bars and restaurants beefed up staff by 33,000 and the construction industry hired 32,000 workers.
U.S. manufacturers generated 12,000 jobs, but that was a bit of a disappointment amid of raft of data showing that business is picking up. Government also added 15,000 jobs.
The average workweek, meanwhile, rose a tick to 34.5 hours to match a post-recession high. The number of hours people work tends to rise when the economy strengthens.
Yet average hourly wages were unchanged at $24.31, reducing the year-over-year gain to just 1.9%. That’s a lot slower compared to wage gains before the Great Recession and a potential restraint on future U.S. growth. Unless incomes rise more sharply, consumers probably won’t be able to increase spending speedily enough to drive the economy into a faster gear.
“The lack of robust wage growth still remains an elusive component in the current expansion,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.
In March, the government said 203,000 new jobs were created in March, up from a preliminary 192,000, based on newly available data. February’s gain was revised to 222,000 from 197,000.
Source: http://www.marketwatch.com/story/us-economy-gains-288000-jobs-in-april-2014-05-02 retrieved 25 May 2014
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