The latest jobs figures from the Department of Labor paint a brighter picture of the overall economy than other recent data, which had been weaker and prompted economists to warn of a spring swoon for the third year in row. Those worries had been heightened after the March jobs report, which initially showed the economy to have added just 88,000 jobs, much fewer than had been expected.
On Friday, however, the government sharply revised upward its estimates for job creation in February and March, concluding that the economy actually generated 332,000 jobs in February and 138,000 in March. The unemployment rate, which is based on a separate survey, fell by 0.1 percentage point to 7.5 percent, from 7.6 percent in March.
“It’s back to normal for this cycle,” said Steve Blitz, chief economist at ITG. “This number is back to the mainstream of what we’ve seen in this recovery.”
Still, Mr. Blitz said, many of the new jobs were in lower-paying sectors like retail and food services. Stores hired 29,000 workers, while the leisure and hospitality sector added 43,000 employees. Hiring for temporary positions also strengthened, as the temporary help sector gained more than 30,000 jobs.
“You’re hiring people, but you’re not generating high-income jobs,” he said. “But work is work. It’s honorable.”
The stock market reacted strongly to the better-than-expected figures, with the Standard Poor’s 500 index breaking through the 1,600-point level for the first time, rising almost 1.2 percent by late morning. The Dow Jones industrial average was up over 150 points, or just over 1 percent as well.
Another positive sign was that the size of the labor force increased, while the total number of unemployed Americans dropped by 83,000 to 11,659,000. What’s more, the ranks of the long-term unemployed, defined as workers who have been out of a job for 27 weeks or more, declined especially sharply, falling by 258,000 to 4.4 million. That’s still far above what’s typical at this stage of a recovery, but it is a marked improvement from past months. The long-term unemployed have been a particular cause of concern for economists in this recovery, because skills degrade the longer a person is out of the work force, and employers are reluctant to hire someone who has not held a job in a while.
The least-educated workers continue to bear the brunt of elevated joblessness, with the unemployment rate for workers who failed to graduate from high school rising to 11.6 percent from 11.1 percent in March. At the other end of the education spectrum, unemployment among people with a college degree or more remained at a low level, rising by a bare 0.1 of a percentage point to 3.9 percent.
Employment in the construction sector, which increased at a healthy pace in the first three months of 2013, actually dipped by 6,000 in April. The recovering housing market has been one of the most notable bright spots in the overall economic landscape, and economists will be closely watching to see if higher home prices and increased construction translate into additional jobs in the months ahead.
At 7.5 percent, overall unemployment now stands at its lowest point since December 2008, when joblessness was rising rapidly after the collapse of Lehman Brothers and the onset of the financial crisis. Unemployment ultimately peaked at 10 percent in October 2009, and there has been a steady, if frustratingly slow, decline since then. The manufacturing sector, which is closely watched as a gauge of broader economic strength, was unchanged in April. Private sector job creation totaled 176,000.
Economists have been warning that the economy — and job creation — will slow in the second-quarter, largely as a result of fiscal tightening in Washington. Payroll taxes increased in January, and across-the-board spending cuts mandated by Congress went into effect in March, and their impact is expected to be felt more broadly in the months ahead.
Article source: http://www.nytimes.com/2013/05/04/business/economy/us-adds-165000-jobs-in-april.html?partner=rss&emc=rss
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