Economic rebound confirmed as unemployment rate plunges to 6.3 percent
The US economy pumped out 288,000 jobs in April, the highest pace in over two years, in a fresh confirmation that growth has resumed after a harsh winter freeze.
Coupled with upward revisions for the previous two months, Labor Department data Friday showed a firm rebound in hiring after a tepid winter pace that had spurred worries of a fundamental downshift in the economy.
The unemployment rate meanwhile plunged to 6.3 percent, down from 6.7 percent, the lowest level since September 2008. But that figure was deceiving.
It represented a sharp fall in the size of the active labor force rather than new hiring, and pointed to continuing weaknesses in the effort to bring down joblessness in the overall economy.
The department called the job gains widespread, led by new positions in professional and business services, healthcare and retail trade.
Jobs in construction also picked up; the sector fell nearly flat amid the series of frigid winter storms that swept the eastern half of the country repeatedly between December and February.
The report “signals that American companies are optimistic the economy will snap back smartly after the largely weather-related slump in the first quarter,” said Sal Guatieri of BMO Capital Markets.
As encouraging as the job creation numbers were, taking the monthly average for the past year to 190,000, the data behind the unemployment rate contained some areas of concern.
The often-volatile household survey showed a drop of 806,000 in the size of the labor force, and a slump in the number of people joining the labor force, both for those entering for the first time and those returning after having dropped out.
That explained much of the steepness in the jobless rate fall, and took the labor force participation rate to 62.8 percent, matching the lowest level in the post-2008 economic crisis period. Before the crisis, the participation rate was above 66 percent.
There was a fall in the number of long-term unemployed, but the overall figure remained high at 3.45 million. And the number of people forced to work part time increased.
In addition, workers’ earnings and hours worked were flat.
That data suggested that policy makers, including at the Federal Reserve, will still see the gains from the April data as a glass half full and keep policies in place to boost the economy.