U.S. Payrolls Grew 244,000 in April; Unemployment at 9%
American employers in April added morejobs than forecast and the labor market in the prior two monthswas stronger than initially estimated, indicating the world’slargest economy is weathering the impact of higher fuel prices.
Payrolls expanded by 244,000 last month, the biggest gainsince May 2010, after a revised 221,000 increase the priormonth, the Labor Department said today in Washington. Thejobless rate climbed to 9 percent, the first increase sinceNovember, a separate survey of households showed. Employment wasforecast to grow by 185,000 last month, according to the medianestimate of economists surveyed by Bloomberg News.
Stocks jumped after four days of losses and the dollarrallied as the report eased concern that the economic recoveryis cooling. The figures bolster Federal Reserve Chairman Ben S. Bernanke’s forecast for a labor market that is “improvinggradually.”
“This is good news, and it’s getting better,” James Glassman, senior economist at JPMorgan Chase & Co. in New York,said in a radio interview on “Bloomberg Surveillance” with TomKeene. “People increasingly are becoming more confident that weare on a recovery track.”
March payrolls were revised up from a previously reportedgain of 216,000, and February employment increased 235,000 aftera prior estimate of 194,000. April payroll projections in theBloomberg survey of 86 economists ranged from gains of 118,000to 325,000, while the jobless rate was projected to hold at 8.8percent.
Shares Rally
The Standard & Poor’s 500 Index advanced 0.4 percent to1,340.2 at the 4 p.m. close in New York.IntercontinentalExchange Inc.’s Dollar Index, used to track thegreenback against the currencies of trading partners includingthe euro and yen, rose 0.8 percent to 74.785.
The economy has generated 760,000 private jobs in the pastthree months, the report showed. Overall, companies added 2.1million jobs since last February, after the loss of 8.8 millionas a result of the 18-month recession that ended in June 2009.
“So much for the headwinds of higher gasoline prices theeconomy is facing,” said Chris Rupkey, chief financialeconomist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York.
Private hiring, which excludes government agencies, rose by268,000 in April, more than the 200,000 median forecast in theBloomberg survey and the most since February 2006, after a231,000 increase in March.
Railroad Hiring
Among companies adding workers is Norfolk Southern Corp. (NSC)The fourth-biggest U.S. railroad is expanding payrolls as itbenefits from higher shipping volumes. First-quarter profitexcluding some items was $1 a share, topping the 90-cent averageestimate from 27 analysts surveyed by Bloomberg.
“We still have a need for additional employees for thebusiness that we’ve got out there,” Mark Manion, chiefoperating officer of Norfolk Southern, said in an April 27teleconference. “There is a need to hire for our currentbusiness as well as hiring for the growth that’s anticipated inthe first -- this year and on into 2012.”
The separate survey of households showed the size of thelabor force was little changed in April and employment shrank by190,000. That pushed the share of the population in the laborforce down to 58.4 percent from 58.5 percent a month earlier.
“The labor market has shown further improvement,”William C. Dudley, president of the Federal Reserve Bank of NewYork, said in a speech after today’s report. “Yet the recoveryremains moderate and we still have a considerable way to go tomeet the Fed’s dual mandate of full employment and pricestability.”
Obama Ratings
The report is a boost for President Barack Obama, whoseadministration is locked in negotiations with Republican leadersin Congress to reduce record budget deficits. The president’sapproval ratings got a lift in public opinion polls after thekilling of al-Qaeda leader Osama bin Laden.
Americans remained concerned about the economy, which islikely to be the top issue in the 2012 presidential election. Ina New York Times/CBS poll conducted May 2-3, 57 percent of thosesurveyed said they approved of the job Obama is doing, up from46 percent who approved last month. Thirty-four percent approvedof how Obama is handling the economy and 55 percent disapproved.
The jobs report “is obviously good news,” White Housepress secretary Jay Carney said aboard Air Force One as Obamatraveled to an event in Indianapolis, adding, “We obviouslyhave a lot more work to do.”
Government payrolls decreased by 24,000 in April, the sixthstraight decline. Local-government employment dropped by 14,000.
Manufacturing Jobs
Factory payrolls increased by 29,000 last month, exceedingthe survey forecast of a 20,000 gain, after a 22,000 rise inMarch.
“We are going to be hiring and growing employment in PugetSound and in South Carolina over the foreseeable future,” Jim McNerney, chief executive officer of Chicago-based plane makerBoeing Co., said on an April 27 teleconference. “Productionrates are fueling really an unprecedented growth for commercialairplanes.”
Employment at service-providers rose 200,000 in April aftera 184,000 gain the prior month. The health care industry added37,300 workers in April. Construction payrolls increased on apickup in heavy and civil engineering employment.
Retail trade employment increased by 57,100 last month,which may have reflected the effects of an Easter holiday thatoccurred later this year than last, making seasonal adjustmentdifficult for the Labor Department.
Jobs Recovery ‘Slow’
While payrolls have grown each month since October,Bernanke said on April 27 that central bankers would like to seemore strength in the U.S. job market, noting that a recovery hasbeen “quite slow.”
“The labor market is improving gradually,” Bernanke saidto reporters during the first-ever press conference following aFederal Open Market Committee meeting. “We would like to makesure that that is sustainable.”
Fed policy makers last week decided to complete theirprogram to buy $600 billion in Treasuries through June to boostthe economy. At the same time, Bernanke said the Fed wouldmaintain record monetary stimulus and keep its balance sheetsteady by reinvesting proceeds of maturing securities.
Economic growth slowed to a 1.8 percent annual rate in thefirst quarter after expanding at a 3.1 percent pace in the lastthree months of 2010, according to Commerce Department figures.
Food, Fuel
Rising fuel and grocery bills are squeezing the budgets ofhouseholds whose spending makes up 70 percent of the economy anddamping consumer confidence. The Bloomberg Consumer ComfortIndex decreased to minus 46.2 in the week ended May 1, thelowest level since the end of March, from minus 45.1 the priorperiod.
Regular gasoline was $3.99 a gallon on May 4, the highestsince July 2008, according to AAA, the nation’s biggest motoringorganization. Food costs rose 0.8 percent in March, also themost since July 2008, consumer-price index data from the LaborDepartment showed last month.
Higher incomes are helping make up for the price increases.Average hourly earnings climbed by 3 cents to $22.95 in April,today’s report showed, while the average work week for allemployees held at 34.3 hours.
The data also showed a decrease in long-term unemployedAmericans. The number of people unemployed for 27 weeks or morefell to 43.4 percent of all job-seekers from 45.5 percent amonth earlier.
