More new jobs in April than expected, but unemployment rose too

McClatchy NewspapersMay 7, 2010 

WASHINGTON — An encouraging April jobs report showed that the U.S. economic recovery is gathering steam, but analysts warned that a widening financial crisis in Europe remains a global threat.

Non-farm payroll employment leapt by a better-than-expected 290,000 jobs in April, the Labor Department reported Friday, but that was shadowed by a jump in the unemployment rate to 9.9 percent. Job growth also was greater in March than originally reported, as the Bureau of Labor Statistics raised the original March estimate from 162,000 new jobs to 230,000.

Private employers alone added 230,000 jobs in April, the strongest surge in four years, with government adding the rest. Revisions to January and February employment estimates showed 121,000 more jobs were added then than first reported too, so the economy has added jobs for four consecutive months.

“These numbers are particularly heartening when you consider where we were a year ago,” President Barack Obama said. When Obama took office, the economy was shedding about 750,000 per month.

When combined with the recent report that the economy grew by 3.2 percent in the first three months of 2010, there’s reason to believe that hiring will continue to improve.

“It feels like a light switch went on in many businesses this spring. The job gains in March and April were strong and broad-based across industries,” said Mark Zandi, the chief economist for Moody’s Analytics, an economic forecaster in West Chester, Pa. “Most encouraging is the job growth in manufacturing and construction which have been the most serious drags on the job market.”

Virtually every sector of the economy added jobs, including health care, leisure and hospitality, professional and business services, manufacturing, construction, retailing, government and financial services.

Ten of the 12 major private economic sectors expanded jobs in April, up from nine in March and six in February. That suggests that “employers are becoming confident enough in the emerging recovery to start hiring workers,” David Huether, chief economist for the National Association of Manufacturers, wrote Friday.

Even the rise in the jobless rate to 9.9 percent from 9.7 percent was considered a sign of improvement, because millions of Americans who'd given up looking for work resumed searching for jobs. The labor force in April grew by more than 800,000.

“Labor force participation is surging. Private job creation was the missing link of the recovery and it now appears to be coming on stream,” RDQ Economics, a New York forecaster, said in a note to investors.

Since December, the labor force — defined as those working or looking for work — has expanded by 1.9 million.

“However, this only corrects for the comparable decline between May and December of 2009, leaving the labor force no bigger now than in May 2009,” said Larry Mishel, president of the liberal Economic Policy Institute.

Over the same period, he said, the number of working-age Americans has grown by 1.6 million, and about 1 million of them are assumed to be entering the labor force. That adds to the challenge of creating enough jobs to lower the unemployment rate.

One key measure of unemployment grew more ominous, however. Statisticians reported that the number of Americans unemployed for half a year or longer rose again in April by 200,000 to 6.7 million. They account for 45.9 percent of the unemployed nationwide; this grim trend suggests that the recession will leave structural changes to the composition of the U.S. workforce.

"In no recession since the Great Depression has long-term joblessness represented such a serious challenge to working families and policymakers," said Gary Burtless of the Brookings Institution, a center-left think tank.

Analysts had expected job growth in the ballpark of 200,000 for April.

“It clearly shows that this economic recovery can no longer be seen as a jobless one," said Bart van Ark, the chief economist for non-profit forecaster The Conference Board. "Following three quarters of growing production, companies apparently find they can’t squeeze out any more output without adding workers. These job gains are comparable to what we’ve seen following other deep recessions, suggesting that U.S. business has become more confident that the recovery is sustainable.”

Still, as Thursday’s almost 1,000-point drop on the Dow Jones Industrial Average showed, the economy remains fragile. Stocks plunged Thursday for reasons that still aren’t clear to regulators, and trading remained volatile on Friday.

A key reason for the volatility remains fear that the debt crisis in Greece could infect all of Europe. With the U.S. recovery and global economy both still viewed as fragile, problems in a small developed economy could dampen the U.S. recovery.

“With so many unemployed and underemployed, wages remain under intense pressure. The economy is thus still very vulnerable to shocks like the Greek debt crisis,” said Zandi.

President Obama spoke with German Chancellor Angela Merkel on Friday, urging the Europeans to solve Greece’s problems, which threaten to spread to other indebted countries such as Spain and Portugal.

“We agreed on the importance of a strong policy response by the affected countries and a strong financial response from the international community,” Obama said.

Translation: Weeks of dithering by Europe resulted in a weak $142 billion rescue package for Greece that’s viewed as too small for the growing problem.

European stocks slid sharply Friday amid fresh evidence that banks there were unwilling to lend to each other, a sign that’s ominously similar to the credit freeze that struck U.S. financial markets in September and October 2008.


  • Construction, 14,000.
  • Transportation, warehousing, down 19,500.
  • Financial services, down 3,000.
  • Leisure and hospitality, up 45,000.
  • Manufacturing, up 44,000.
  • Health care, up 20,000.
  • Government, up 59,000.
  • Retail, up 12,400.
  • Professional and business services, 80,000.


April jobs report

April jobs by sector


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