Google News: Unemployment Rate at Lowest Since 2008 as Hiring Jumps

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Economy |Unemployment Rate at Lowest Since 2008 as Hiring Jumps

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April Jobs Report | The Upshot Countdown

The Upshotâ€™s David Leonhardt breaks down the April Jobs report in less than 30 seconds.

Credit By A.J. Chavar on Publish Date May 2, 2014

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The American economy gained steam in April, adding 288,000 jobs, while the unemployment rate fell to 6.3 percent, the lowest level since September 2008.

After a sharp slowdown in December and January, and a modest improvement since then, economists had been forecasting a healthy gain for April as consumer and business activity rose in tandem with temperatures in many parts of the country.

But the good news was tempered by a drop of 806,000 in the number of Americans in the labor force, pushing the labor participation rate down sharply. And despite the fall in joblessness, average hourly earnings did not rise at all.

The consensus among economists polled by Bloomberg before the Labor Departmentâ€™s announcement Friday morning called for an increase of 218,000 in nonfarm payrolls, with the unemployment rate falling by 0.1 percent to 6.6 percent.

To be sure, month-to-month swings in hiring are a snapshot of the economy, rather than a portrait, and frequently blur.

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For example, government statisticians on Friday revised upward the number of jobs added in February and March by 36,000 total, suggesting the economy was stronger than first assumed. And the April data could be significantly revised upward â€” or downward â€” next month.

A job fair in Detroit last month. Joshua Lott/Getty Images

Still, the 288,000 figure for April was the best monthly increase since January 2012.

More telling is the average monthly gain in payrolls over the last year, which now stands at 197,000. So therefore, Aprilâ€™s data show a significant improvement over the longer-term average.

The monthly Labor Department report is based on two separate surveys, one of households, the other of establishments, including government agencies, and private-sector businesses like factories, offices and retail stores.

The establishment survey provides the monthly estimate for payroll changes, and is favored by economists and professional investors, while the unemployment rate is derived from the more volatile survey of households. Although the two measures tend to correspond over time, month-to-month variations can be wide.

For example, the April survey of about 60,000 households indicated that 73,000 Americans lost work last month, versus the gain of 288,000 in the establishment survey.

At 6.3 percent, the unemployment rate is down sharply from the peak of 10 percent it reached in the wake of the recession in October 2009. But it is still above the historical average for this stage of an economic recovery, and masks pockets of significant joblessness among blacks, teenagers and workers with a high school degree or less.

Strong sectors of growth last month included construction, which gained 32,000 jobs and retail, which added 35,000 jobs. Professional and business services, an area of the economy that is closely watched as a barometer for broader white-collar activity, added 75,000 positions.

On Wednesday, Federal Reserve officials said that they are seeing an increase in economic activity, and would continue to gradually reduce monthly bond purchases aimed at stimulating the economy.

Some other yardsticks in recent days have been encouraging, said Michelle Meyer, senior United States economist at Bank of America Merrill Lynch. She pointed to the ADP survey out Wednesday of hiring among private employers in April, which showed the best monthly increase since November, as well as the April rise in the Institute for Supply Managementâ€™s index of factory activity, announced Thursday.

â€œThe second quarter seems to be starting out on a healthy footing,â€ said Ms. Meyer said Thursday.