American employers in April added more jobs than forecast and the labor market in the prior two months was stronger than initially estimated, indicating the world’s largest economy is weathering the impact of higher fuel prices.
Payrolls expanded by 244,000 last month, the biggest gain since May 2010, after a revised 221,000 increase the prior month, the Labor Department said today in Washington. The jobless rate climbed to 9 percent, the first increase since November, a separate survey of households showed. Employment was forecast to grow by 185,000 last month, according to the median estimate of economists surveyed by Bloomberg News.
Stocks jumped after four days of losses and the dollar rallied as the report eased concern that the economic recovery is cooling. The figures bolster Federal Reserve Chairman Ben S. Bernanke’s forecast for a labor market that is “improving gradually.”
“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 Tom Keene. “People increasingly are becoming more confident that we are on a recovery track.”
March payrolls were revised up from a previously reported gain of 216,000, and February employment increased 235,000 after a prior estimate of 194,000. April payroll projections in the Bloomberg survey of 86 economists ranged from gains of 118,000 to 325,000, while the jobless rate was projected to hold at 8.8 percent.
Shares Rally
The Standard & Poor’s 500 Index advanced 0.4 percent to 1,340.2 at the 4 p.m. close in New York. IntercontinentalExchange Inc.’s Dollar Index, used to track the greenback against the currencies of trading partners including the euro and yen, rose 0.8 percent to 74.785.
The economy has generated 760,000 private jobs in the past three months, the report showed. Overall, companies added 2.1 million jobs since last February, after the loss of 8.8 million as a result of the 18-month recession that ended in June 2009.
“So much for the headwinds of higher gasoline prices the economy is facing,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York.
Private hiring, which excludes government agencies, rose by 268,000 in April, more than the 200,000 median forecast in the Bloomberg survey and the most since February 2006, after a 231,000 increase in March.
Railroad Hiring
Among companies adding workers is Norfolk Southern Corp. (NSC) The fourth-biggest U.S. railroad is expanding payrolls as it benefits from higher shipping volumes. First-quarter profit excluding some items was $1 a share, topping the 90-cent average estimate from 27 analysts surveyed by Bloomberg.
“We still have a need for additional employees for the business that we’ve got out there,” Mark Manion, chief operating officer of Norfolk Southern, said in an April 27 teleconference. “There is a need to hire for our current business as well as hiring for the growth that’s anticipated in the first -- this year and on into 2012.”
The separate survey of households showed the size of the labor force was little changed in April and employment shrank by 190,000. That pushed the share of the population in the labor force 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 New York, said in a speech after today’s report. “Yet the recovery remains moderate and we still have a considerable way to go to meet the Fed’s dual mandate of full employment and price stability.”
Obama Ratings
The report is a boost for President Barack Obama, whose administration is locked in negotiations with Republican leaders in Congress to reduce record budget deficits. The president’s approval ratings got a lift in public opinion polls after the killing of al-Qaeda leader Osama bin Laden.
Americans remained concerned about the economy, which is likely to be the top issue in the 2012 presidential election. In a New York Times/CBS poll conducted May 2-3, 57 percent of those surveyed said they approved of the job Obama is doing, up from 46 percent who approved last month. Thirty-four percent approved of how Obama is handling the economy and 55 percent disapproved.
The jobs report “is obviously good news,” White House press secretary Jay Carney said aboard Air Force One as Obama traveled to an event in Indianapolis, adding, “We obviously have a lot more work to do.”
Government payrolls decreased by 24,000 in April, the sixth straight decline. Local-government employment dropped by 14,000.
Manufacturing Jobs
Factory payrolls increased by 29,000 last month, exceeding the survey forecast of a 20,000 gain, after a 22,000 rise in March.
“We are going to be hiring and growing employment in Puget Sound and in South Carolina over the foreseeable future,” Jim McNerney, chief executive officer of Chicago-based plane maker Boeing Co., said on an April 27 teleconference. “Production rates are fueling really an unprecedented growth for commercial airplanes.”
Employment at service-providers rose 200,000 in April after a 184,000 gain the prior month. The health care industry added 37,300 workers in April. Construction payrolls increased on a pickup 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 that occurred later this year than last, making seasonal adjustment difficult 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 see more strength in the U.S. job market, noting that a recovery has been “quite slow.”
“The labor market is improving gradually,” Bernanke said to reporters during the first-ever press conference following a Federal Open Market Committee meeting. “We would like to make sure that that is sustainable.”
Fed policy makers last week decided to complete their program to buy $600 billion in Treasuries through June to boost the economy. At the same time, Bernanke said the Fed would maintain record monetary stimulus and keep its balance sheet steady by reinvesting proceeds of maturing securities.
Economic growth slowed to a 1.8 percent annual rate in the first quarter after expanding at a 3.1 percent pace in the last three months of 2010, according to Commerce Department figures.
Food, Fuel
Rising fuel and grocery bills are squeezing the budgets of households whose spending makes up 70 percent of the economy and damping consumer confidence. The Bloomberg Consumer Comfort Index decreased to minus 46.2 in the week ended May 1, the lowest level since the end of March, from minus 45.1 the prior period.
Regular gasoline was $3.99 a gallon on May 4, the highest since July 2008, according to AAA, the nation’s biggest motoring organization. Food costs rose 0.8 percent in March, also the most since July 2008, consumer-price index data from the Labor Department 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 all employees held at 34.3 hours.
The data also showed a decrease in long-term unemployed Americans. The number of people unemployed for 27 weeks or more fell to 43.4 percent of all job-seekers from 45.5 percent a month earlier.
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