The U.S. economy picked up steam in April, as employers added 288,000 jobs, while the unemployment rate fell to 6.3 percent, the lowest level since September 2008.
After a sharp slowdown in job growth in December and January, and a modest improvement since then, economists had been forecasting a healthy gain for April as consumer and business activity rose in tandem with temperatures in many parts of the country.
But the good news was tempered by a drop of 806,000 in the number of Americans in the labor force, pushing the labor participation rate down sharply. And despite the fall in joblessness, average hourly earnings were flat.
“The payroll numbers suggest that the economy is recovering from a weather-induced showdown,” said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. But “even with the drop in the unemployment rate,” he said, “we still have not reached to point where workers have negotiating power.”
To be sure, month-to-month swings in hiring are a snapshot of the economy, rather than a portrait, and frequently blur.
For example, government statisticians Friday revised upward the number of jobs added in February and March by a total of 36,000, suggesting that the economy was stronger than first assumed. And the April data could be significantly revised upward – or downward – next month.
Still, the 288,000 figure for April was the best monthly increase since January 2012. And if those kinds of labor market gains continue for the balance of 2014, it would be a much-needed element of good news for President Barack Obama and Democrats on Capitol Hill, who have been apprehensive ahead of midterm elections in November.
At a Rose Garden news conference Friday, Obama hailed the good economic news, crediting the “grit and determination of the American people” for moving the country forward economically.
More telling than any one month’s change is the average monthly gain in payrolls over the last year, which now stands at 197,000. So, April’s data show a significant improvement over the longer-term average.
The monthly Labor Department report is based on two surveys, one of households, the other of establishments, including government agencies, and private-sector businesses like factories, offices and retail stores.
The establishment survey provides the monthly estimate for payroll changes, and is favored by economists and professional investors, while the unemployment rate is derived from the more volatile survey of households.
