Economy shows solid job growth for a third straight month

The American economy created a healthy batch of new jobs in April for the third straight month, allaying fears of a stall in hiring due to higher oil prices and concerns about an economic slowdown.

The Labor Department said Friday that employers last month added 244,000 new net jobs across a broad spectrum of industries. That was similar to the payroll growth numbers in March and February.

But the unexpectedly strong report on hiring was clouded by the news that the jobless rate for April edged up to 9%, from 8.8% in March after dropping continuously since November’s rate of 9.8%.

The unemployment rate is derived from a survey of households, whereas the payroll job figures come from a survey of employers.


The two surveys sometimes provide conflicting story lines, and in such cases, analysts tend to put more stock in the larger, more detailed survey of employers.

Economists and investors seemed to heave a sigh of relief after Friday’s report as the stock market turned up after several days of weakening performance. Analysts were generally forecasting job gains of about 185,000 for April, and some had ratcheted down their expectations in recent days in the wake of other reports showing the economy may have hit a soft patch at the start of spring, as it did last year at this time.

It was reported earlier that U.S. economic output expanded in the first quarter at an anemic 1.8% annual rate, and unemployment claims have been surging in recent weeks amid sharply higher fuel prices and concerns about the economic outlook with uncertainties surrounding the Middle East, Japan and Europe.

“Headwinds remain, but not enough to derail the recovery or set us back momentarily,” said Diane Swonk, chief economist at Mesirow Financial in Chicago, in a note Friday.

At the same time, Swonk remained cautious about the outlook. Apart from the lingering effects of global shocks, she noted that the jump in new unemployment claims recently were reported in the weeks after the April jobs surveys were conducted. And job losses in the public sector could intensify, she said, with more teachers getting pink slips as the school year winds down and local governments try to deal with budget shortfalls.

What’s more, even though the job gains over the last three months were solid, averaging 233,000 a month, those numbers are still modest compared to what’s needed to recover the more than 8.8 million jobs lost between the end of 2007 and early 2010. Since February 2010, the economy has regained about 1.8 million jobs.

The number of officially unemployed stood at 13.75 million in April. And that was up 205,000 from March, according to the Labor Department’s household survey.

“At this point, coming out of a recession this deep, we should be getting unambiguously huge growth, of 300,000 to 400,000 [new jobs] a month,” said Heidi Shierholz, a labor economist at the Economic Policy Institute. “And it’s just nowhere near that.” She concluded: “We’re still in a rocky place.”


It’s unclear whether the unemployment rate will go up in the coming months. Theoretically it should as the job market improves and more of the millions of people who had dropped out of the job market during the recession return to looking for jobs as their prospects improve. The Labor Department doesn’t count jobless people who aren’t looking for work as unemployed.

Friday’s report suggests that many employers may have little choice but to add workers if they want to grow sales. Many companies had cut to the bone during the recession, and many also spent heavily on new equipment and computers to boost productivity to make up for the reduced work force.

But that can only go so far. Last month the retail industry added 57,100 to its payrolls, about half of them at general merchandise stores.

Manufacturing continued to strengthen, taking on 29,000 more workers in April. Since December 2009, factory payrolls have risen by 250,000, the Labor Department said.


Business and professional services, which generally pay higher-than-average wages, increased by 51,000, with consulting businesses, computer services and architectural firms all showing solid growth.

Educational and health services, and the leisure industry, each also added nearly as many jobs. Even the hard-hit construction industry saw a small gain last month.

Government was the only major employment group that saw a decline; its payrolls shrank by 24,000, mostly because of cuts at state and public agencies.