Employers boosted payrolls in April by the most in two years and the jobless rate plunged to 6.3% as companies grew confident the U.S. economy was emerging from a first-quarter slowdown.
The 288,000 gain in employment was the biggest since January 2012 and followed a revised 203,000 increase the prior month, Labor Department figures showed today in Washington. The median forecast in a Bloomberg survey of economists called for a 218,000 advance. Unemployment dropped to the lowest level since September 2008.
Households spent more freely as the first quarter drew to a close and manufacturing accelerated, helping explain why companies such as Ford Motor Co. are taking on more workers. The figures corroborate the Federal Reserve’s view that the expansion is perking up after stagnating last quarter, indicating it will keep trimming stimulus.
“The economy is gathering momentum after the bad winter,” said Michael Gapen, senior U.S. economist at Barclays Plc in New York, whose firm’s projection was among the closest in the Bloomberg survey. “The unemployment rate will stay in its downward trend, which means tapering will continue.”
Stock-index futures fluctuated and Treasury yields climbed after the figures, with the contract on the Standard & Poor’s 500 Index expiring in June rising 0.1% to 1,879.3 at 9:15 a.m. in New York. The yield on the benchmark 10-year Treasury note increased to 2.68% from 2.61% late yesterday.
The increase in employment was broad-based, with construction companies adding the most workers in three months and retailers taking on the most this year. Manufacturing, temporary help services and health care were among other industries boosting payrolls.
One cloud in today’s employment report is worker pay is stagnating. Average hourly earnings held at $24.31 in April, and were up 1.9% over the past 12 months, the smallest gain this year.
The drop in the unemployment rate from March’s 6.7% came as the agency’s survey of households showed the labor force shrank by more the 800,000 in April. The so-called participation rate, which indicates the share of working-age people in the labor force, decreased to 62.8%, matching the lowest level since 1978, from 63.2% a month earlier.
Forecasts for April payrolls ranged from increases of 155,000 to 292,000, according to the Bloomberg survey of 94 economists. Last year, the U.S. added more than 194,000 jobs each month, compared with about 186,000 in 2012. Economists surveyed by Bloomberg on April 4-9 project payroll gains to match 2013.
Private payrolls, which don’t include government agencies, increased 273,000 in April after a 202,000 gain. Last month, hiring by companies surpassed the pre-recession peak for the first time.
Americans are the most upbeat about finding a “quality job” than at any time since January 2008, according to Gallup data released April 25. A separate survey by the Conference Board shows the proportion of consumers who said jobs would become more plentiful in the next six months climbed in April to the highest level since January.