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US nonfarm payrolls jump in April, jobless rate up

US nonfarm payrolls jump in April, jobless rate up
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First Published: Fri, May 07 2010. 08 35 PM IST
Updated: Fri, May 07 2010. 08 35 PM IST
Washington: US employment grew at the fastest pace in four years in April as private sector businesses ramped up hiring, showing the labor market recovery picking up steam.
Employers added 290,000 jobs in April, the Labor Department said on Friday, far more than analysts had expected. The department also revised figures for February and March to show 121,000 more jobs were added than previously thought.
The unemployment rate, however, rose to 9.9% as discouraged workers re-entered the labor force to look for work.
Stubbornly high unemployment has been a political sore spot for President Barack Obama and his fellow Democrats, even though the job market is showing increased vigor.
Analysts polled by Reuters had expected nonfarm payrolls to rise 200,000 last month and the jobless rate to remain unchanged at 9.7%. The median forecast from the 20 most accurate forecasters was for a payrolls increase of 188,000.
“I think we are moving into this very reassuring range of strong employment growth. It is consistent with the way the economy is going,” said Kurt Karl, chief US economist at Swiss Re in New York.
US stock index futures held gains after the report, while treasury debt prices extended losses. The US dollar trimmed losses versus the the euro and rose against the yen.
Private sector employment increased 231,000, also the largest gain since March 2006, after rising 174,000 in March. Private payrolls have now grown for four months. Census hiring contributed 66,000 jobs. Analysts had expected private employment to rise between 50,000 and 100,000 in April.
Data ranging from manufacturing to consumer spending have pointed to a pick-up in the recovery from the US economy’s longest and deepest downturn since the Great Depression.
“The trend is improving,” said Zach Pandl, an economist at Nomura Securities International in New York. “The economic recovery is gaining momentum.”
But public disenchantment over the economy, especially the labor market, is damaging Obama’s popularity. His fellow Democrats face a tough fight in congressional elections in November, with their majority status at stake.
Republicans say Obama’s policies — including a record economic stimulus package — have failed to deliver on their promise of reducing the jobless rate, which is expected to still be painfully high when elections rolls around.
About 8.2 million jobs were lost during the recession and economists warn it is likely to take years to regain that lost employment.
US consumers have begun to participate in what has been a manufacturing-led recovery, but job growth is crucial to sustaining that trend.
Last month, manufacturing payrolls increased 44,000 after rising 19,000 in March. Construction employment gained 14,000, rising for a second month and defying expectations of a fall.
Payrolls in the service sector increased 166,000, advancing for a third month. Temporary help hiring increased 26,200, strengthening the jobs recovery theme.
Temporary employment is seen as a precursor to full-time jobs. Government payrolls rose 59,000, adding onto the prior month’s 56,000 increase.
The average workweek rose to 34.1 hours from 34 hours in March.
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First Published: Fri, May 07 2010. 08 35 PM IST
More Topics: US | Jobs | Employment | Market | Nonfarm payrolls |