WASHINGTON – U.S. employers added an unexpectedly large 290,000 jobs in April, the strongest hiring burst in four years and a welcome signal that companies are becoming more confident that the economy will continue to strengthen.
Paradoxically, the government reported an uptick in the unemployment rate – to 9.9 percent from 9.7 percent in the first three months of this year. Most analysts didn’t see that coming either, but they didn’t view the increase as a sign of worsening conditions. Rather, they said it reflected the fact that many more out-of-work people, seeing better employment prospects, are rejoining the labor market in search of jobs.
Economists, though encouraged by the tens of thousands of new jobs, remained cautious about the near-term outlook. Although the total jobs created in April far exceeded their expectations, many analysts questioned whether that momentum could be sustained, especially if the financial turmoil in Europe spreads.
What’s more, even if U.S. employers could maintain April’s job growth numbers indefinitely, analysts said, it would be several years before the American economy filled the huge jobs hole created during the recession in 2008 and 2009, when 8.4 million positions were lost.
The economy needs to create about 125,000 new net jobs every month just to keep pace with the population growth.
“It was a good report, but I think we have a long, long way to go,” said Dean Baker, co-director of the Center for Economic and Policy Research in Washington. Baker said job growth may soften in the coming months as state and local governments react to budget problems and the benefits of the federal economic stimulus money fade.
The Labor Department also revised upward its tally of the nation’s payrolls in February and March. It said Friday that the economy added 230,000 jobs in March, up from 162,000 previously estimated, and that employers created 39,000 jobs in February instead of cutting 14,000 positions. All told, payroll jobs have increased 573,000 in the first four months of this year.
Those figures are derived from a survey of employers. A separate survey of households that includes self-employed showed 550,000 more people in the U.S. were working in April than in March.
“New business formations will continue to keep the economy afloat, if not play a major role in the turnaround,” said Michael Bernick, former director of California’s Employment Development Department and now with a San Francisco law firm.
President Barack Obama, after seeing millions of jobs disappear during his first year in office, was quick to claim at least partial credit for the job numbers.
Calling those figures the “truest measure of progress,” he said the “difficult and, at times, unpopular steps that we’ve taken over the past year are making a difference,” specifically citing the federal government’s $787 billion Recovery Act stimulus package.
But there are limits to what government can do, Obama added. “The true engine of our job growth in this country will always be the private sector. We still have more to do.”
In April, private employers kicked in 231,000 of the 290,000 new net jobs. Analysts were expecting only a fraction of that number, projecting that the Census Bureau would add more temporary staff than all the private-sector hiring last month.
As it turned out, the agency added only 66,000 workers last month in connection with the 2010 census. The Census Bureau is expected to hire hundreds of thousands of more staff before summer, which will likely give a big temporary boost to the job numbers for May.
Last month manufacturing continued its resurgence, boosting payrolls by 44,000. Since December, factory employment has risen by 101,000, the Labor Department said. The increases came after manufacturers shed more than 2 million workers during the recession amid dramatic cutbacks in production and inventories.
Economists doubt last month’s hefty factory payroll gains can be sustained once companies build up their inventories and many of them, particularly exporters, may take a hit from the depressed euro and weaker growth prospects in Europe.
The nation’s construction sector also seems to be coming out of its hiring doldrums, adding 14,000 jobs in April after an increase of 26,000 in March. Industry groups said the federal stimulus, which earmarked billions for highway and bridge projects, has been contributing to the gains. Even the long-depressed new-home construction market is showing some signs of improvement, although housing prices have yet to turn around.