Jobless rate rises to 9.9 percent as size of labor force increased
WASHINGTON - U.S. employment grew at the fastest pace in four years in April as private sector businesses ramped up hiring, showing the labor market recovery gaining steam.
Employers added 290,000 jobs in April, the Labor Department said Friday, far more than analysts had expected. The department also revised figures for February and March to show 121,000 more jobs were added than previously estimated.
“I think we are moving into this very reassuring range of strong employment growth. It is consistent with the way the economy is going,” said Kurt Karl, chief U.S. economist at Swiss Re in New York.
The unemployment rate, however, rose to 9.9 percent as discouraged workers started to look for work again.
Stubbornly high unemployment has been a political sore spot for President Barack Obama and his fellow Democrats, even though the job market is showing increased vigor.
Analysts polled by Reuters had expected nonfarm payrolls to rise 200,000 last month and the jobless rate to remain unchanged at 9.7 percent. The median forecast from the 20 most accurate forecasters was for a 188,000 increase in payrolls.
The stronger-than-expected reading for the most widely watched U.S. economic indicator did little to encourage investors worried about the euro zone’s debt crisis.
U.S. stocks, which Thursday suffered their biggest-ever intraday slide, traded near 1 percent lower Friday and prices of Treasury bonds, which would normally fall on signs of economic growth, were flat.
Private sector employment increased 231,000, the largest gain since March 2006, after rising 174,000 in March. Private payrolls have grown for four months.
Analysts had expected private employment to rise between 50,000 and 100,000 in April.
Census hiring contributed 66,000 jobs.
Data ranging from manufacturing to consumer spending have pointed to a pick-up in the recovery from the U.S. economy’s longest and deepest downturn since the Great Depression.
The jump in U.S. jobs growth was mirrored in Canada, where a record number of workers found jobs in April, stunning markets and adding pressure on the Bank of Canada to raise interest rates in June, ahead of other major industrialized countries.
The U.S. data was unlikely to put pressure on the Federal Reserve, with economists noting earnings for private sector workers were flat in April and would not put pressure on inflation.
Nonetheless, investors slightly increased expectations the Fed will raise its key target rate. Implied prospects that the Fed will raise the target by its Sept. 21 meeting edged up to 50 percent from about 46 percent before the jobs figures.
By Lucia Mutikani
Tags: barack obama, businesses, financial markets, Global Economy, stock market, unemployment rate, us economic recovery, us economy, us employment, us job market, USA
