WASHINGTON -- The labor market rebounded last month as the U.S. economy added 165,000 net new jobs and the unemployment rate dropped to 7.5%, its lowest level in more than five years, the Labor Department said Friday.
The April jobs figure exceeded analyst expectations of about 148,000 net new jobs and helped counter concerns that hiring was significantly slowing after a disappointing report in March.
The government also issued major upward revisions for job creation in March and February.
The initially disappointing 88,000 figure for March was revised to a more respectable 138,000. The February figure was revised up to 332,000 from the initial report of 268,000. That was the most new jobs added in a month since May 2010.
The private sector added 176,000 net new jobs in April, led by a gain of 73,000 in professrional and business service industry positions, the Labor Department report said. However, government shed 11,000 jobs, with the federal workforce down 8,000 positions.
The unemployment rate ticked down last month from 7.6% in March. The 7.5% rate for April was the lowest since December 2008.
“With an increase of 165,000 jobs in April, and following the significant upward revisions for February and March, the job market looks better than expected despite the sequester or issues like the rising cost of providing healthcare benefits,” said Kathy Bostjancic, director of macroeconomic analysis at the Conference Board.
The economic recovery has been showing signs of slowing as tax increases, the federal spending cuts known as the sequester and the European recession combine as obstacles to growth.
The U.S. economy expanded at a 2.5% annual rate in the first three months of the year, a marked improvement over the 0.4% growth in the last quarter of 2012. But the figure was below expectations, and analysts forecast that growth will slow to about 1% in the second quarter of this year before picking up again.
Economic reports in recent days have been weak, although initial jobless claims dropped last week to their lowest level in more than five years.
Amid concerns about the pace of the recovery, Federal Reserve policymakers said for the first time this week that they were prepared to increase their controversial stimulus efforts.