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May 08, 2015 at 08:38 AM
Payrolls rebounded in April following an even bigger setback a month earlier than previously estimated, a sign companies are confident the U.S. economy will reboot after stagnating early this year. The unemployment rate dropped to 5.4 percent.
The 223,000 net increase in employment followed an 85,000 gain in March that was the smallest since June 2012, figures from the Labor Department showed Friday in Washington. The jobless rate fell to the lowest since May 2008 as more Americans entered the labor force and found work. Average hourly earnings climbed less than forecast.
Construction and health care were among the industries that accelerated the pace of hiring last month as the economy emerged from temporary setbacks that included bad weather and a labor dispute at West Coast ports. Such job growth and steadily rising wages may keep the Federal Reserve on track to raise its benchmark interest rate later this year.
Stock-index futures advanced and yields on Treasury securities fell after the report, with the contract on the Standard & Poor’s 500 Index expiring in June rising 0.7 percent to 2,099.3 at 8:40 a.m. in New York. The yield on the benchmark 10-year Treasury note dropped to 2.14 percent from 2.18 percent late on May 7.
Previous Months
The median forecast in a Bloomberg survey of 96 economists called for a 228,000 advance, with estimates ranging from gains of 175,000 to 327,000. March was revised from a previously reported 126,000 advance. Revisions to prior reports subtracted a total of 39,000 jobs from overall payrolls in the previous two months.
To calculate the data, the Labor Department surveys businesses for the pay period that includes the 12th of the month. The span between the agency’s April and March employment surveys was five weeks, rather than the typical four.
The participation rate, which indicates the share of working-age people who are employed or looking for work, increased to 62.8 percent from 62.7 percent in March, which matched the lowest since 1978.
Hourly Earnings
Wage growth remains limited, with average hourly earnings rising 0.1 percent in April after a revised 0.2 percent gain that was weaker than initially reported. Compared with a year earlier, hourly pay was up 2.2 percent last month, less than the Bloomberg median estimate of 2.3 percent.
The average work week for all employees held at 34.5 hours.
Construction companies took on 45,000 workers in April, the biggest gain since January 2014. Employment in health services increased 55,600 in April, the strongest increase in five months.
Michele Natale, 54, a licensed practical nurse who’s been looking for steady employment for a year, said she’s relieved to be starting a new, full-time job next week with Blue Cross Blue Shield. The work couldn’t come at a better time, as there’s currently “not enough money to pay rent, no money for food, not money for gas — it’s been horrible,” she said.
