WASHINGTON -- Economists and investors breathed a sigh of relief Friday as the government reported better-than-expected job growth in April and boosted hiring figures for the previous two months.
The 165,000 net new jobs added last month eased fears that the economic recovery was headed toward another spring slowdown after an initially disappointing March number.
The Labor Department report fueled a major stock market rally. The Dow Jones industrial average shot up about 177 points in early trading to break 15,000 for the first time. The Standard & Poor's 500 index was up about 1.2% as well, vaulting over the 1,600 level for the first time.
Combined with upward revisions Friday for the February and March employment figures, the economy is averaging 196,000 added jobs a month so far this year.
The unemployment rate ticked down a tenth of a percentage point to 7.5%, the lowest level since December 2008. Unlike some previous drops, this time it wasn't because more people simply got discouraged and stopped looking for work.
"The drop in the unemployment rate was for the right reasons," said Stuart Hoffman, chief economist at PNC Financial Services. "This wasn’t just more people dropping out of the workforce. There were actually more people looking for work, and they found it."
The civilian labor force participation rate held steady at about 63.3% in April. That's a good sign, even though the level is historically low.
"While more work remains to be done, today's employment report provides further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression," said Alan B. Krueger, chairman of the White House Council of Economic Advisors.
He noted that April marked the 38th straight month of private-sector job growth. Private companies added 176,000 jobs last month.
But there were some concerns. Government shed 11,000 positions. The construction industry dropped 6,000 jobs, the first loss in nearly a year, and hiring was flat in the well-paying manufacturing sector.
Concerns were high after the government initially reported the economy added just 88,000 net new jobs in March. But on Friday, the Labor Department revised that figure to a more respectable 138,000.
Already strong job growth of 268,000 in February was revised up to 332,000. It marked the best monthly number since May 2010, but that figure was artificially boosted by the hiring of more than 400,000 temporary census workers.
Excluding May 2010, the 332,000 net new jobs added in February were the most in a month since 2005.
Hoffman said he expected April's job-creation number to be revised higher as well, and the economy would avoid a spring swoon because of improvements in the housing market and lower gas prices.
"The past two years, somehow when the temperatures went up, the economy’s temperature went down," he said.
"When you got that initially disappointing March jobs report, for the past month everybody said, "Uh oh, the economy’s going to do it again, just wilt or melt with better weather," Hoffman said. "This proves that’s not happening. The economy's going to do better this spring."
But although April's figure is a relief, job growth remains relatively weak, said Heidi Shierholz, an economist with the Economic Policy Institute, a liberal think tank.
"People are really happy. It is better than what they thought, but once that excitement wears off it's, 'Holy hell, this still is a problem,'" she said.
Even at February's 332,000 job-creation pace, it would take until the start of 2016 to get back to the pre-Great Recession unemployment rate of 5%, Shierholz said.
At the 196,000-jobs-a-month pace so far this year, it would take until the summer of 2018 to get back to a normal unemployment level, she said.
"We just have an incredibly weak labor market, so a report that just holds us steady is a huge problem," Shierholz said.
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