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US unemployment hits lowest rate in four years on strong April jobs figures US unemployment hits lowest rate in four years on strong April jobs figures
(about 1 hour later)
US unemployment hit a four-year low in April as the US job market bucked off fears of a spring freeze and added 165,000 new jobs, the Labor Department said Friday.US unemployment hit a four-year low in April as the US job market bucked off fears of a spring freeze and added 165,000 new jobs, the Labor Department said Friday.
The unemployment rate fell to 7.5% in April, its lowest rate since December 2008. The news came after a week of worrying news for the US's fragile economic recovery. Federal budget cuts, triggered by the sequestration spending cuts, started in March. Last month the US added just 88,000 new jobs. The unemployment rate fell to 7.5% in April, its lowest rate since December 2008. The news came after a week of worrying news for the US's fragile economic recovery as the Federal Reserve warned that Washington's budget cuts were holding back the economy.
On Friday the bureau of labour statistics revised the last three months figures substantially. March was revised higher to 138,000. February's job growth revised up to 332,000, after previously being reported at 268,000. Federal budget cuts, triggered by the sequestration spending cuts, started in March. Last month the US added just 88,000 new jobs. This week ADP, the largest payroll processor, said the private sector had added 119,000 new jobs during March. The figure was below economists' forecasts of 150,000.
The number of long-term unemployed – those jobless for 27 weeks or more – declined by 258,000 to 4.4 million and their share of the unemployed declined by 2.2 percentage points to 37.4%. Over the past 12 months, the number of long-term unemployed has decreased by 687,000, and their share has declined by 3.1 points. The bureau of labour statistics dampened fears of a slowdown Friday as it revised the last three months' figures substantially higher. March was revised to 138,000 from 88,000. February's job growth was revised up to 332,000, after previously being reported at 268,000. The US added an extra 114,000 new jobs in the last two months after the revisions.
The bureau of labor statistics said that over the prior 12 months, employment growth averaged has 169,000 per month. The figure is still low but after revisions but the latest report paints a far healthier picture of the jobs market than had been expected. Professional and business services added 73,000 jobs in April and has added 587,000 jobs over the past year, said the BLS. In a note to clients, Dan Greenhaus, chief strategist at trader BTIG, said sequestration seemed to have "little to no effect on this report".
Employment in temporary help services rose 31,000, professional and technical services added 23,000 and retail trade employment increased by 29,000 in April. The BLS said last month that retail had shed 24,000 jobs, triggering concerns about a slowdown in spending after the imposition of payroll taxes at the end of the year. The number of long-term unemployed – those jobless for 27 weeks or more – declined by 258,000 to 4.4 million and their share of the unemployed declined by 2.2 percentage points to 37.4%. Over the past 12 months, the number of long-term unemployed has decreased by 687,000, and their share has declined by 3.1 points.
Ahead of the report economists had forecast that the economy added around 150,000 jobs in April. On average employers added 200,000 jobs a month in the winter. But the pickup appeared to have stalled last month. The bureau of labor statistics said that over the prior 12 months, employment growth averaged has 169,000 per month. The figure is still low but after revisions but the latest report paints a far healthier picture of the jobs market than had been expected. The private sector added 176,000 new jobs last month. Professional and business services added 73,000 jobs in April and has added 587,000 jobs over the past year, said the BLS.
There was more bad news for the jobs markets this week with the release of the latest ADP survey of private hirings. According to ADP, the largest payroll processor, the US added 119,000 new jobs in the private sector during March. The figure was below economists' forecasts of 150,000. Employment in temporary help services rose 31,000, professional and technical services added 23,000 and retail trade employment increased by 29,000 in April. The BLS said last month that retail had shed 24,000 jobs, triggering concerns about a slowdown in spending after the imposition of payroll taxes at the end of the year. The manufacturing sector, a closely watched gauge of broader economic strength, was unchanged in April while government employment fell by 11,000.
But Friday's nonfarm figures showed private companies adding 176,000 jobs last month. Growth in the jobs market has to date been fueled almost entirely by the private sector as the US government has continued to cut positions. Ahead of the report economists had forecast that the economy added around 150,000 jobs in April. On average employers added 200,000 jobs a month in the winter and before Friday the pickup appeared to have stalled.
Alan Krueger, chairman of the council of economic advisers and president Barack Obama's chief economic adviser, said: "While more work remains to be done, today's employment report provides further evidence that the US economy is continuing to recover from the worst downturn since the Great Depression." He urged Congress "to replace the sequester with balanced deficit reduction".
Republican House speaker John Boehner said: "There's some good news in today's report, but the president's policies still aren't providing the robust economic growth and job creation the American people desperately need. To get things moving, we need to seize opportunities the president has been ignoring, and focus on growing our economy rather than growing more government."
Douglas Roberts, senior international economist for Standard Life Investments, said the report was far better than expected but cautioned that jobs growth was still relatively weak. "Small businesses still seem unexcited by current prospects and they are responsible for two thirds of growth [in the jobs market] normally," he said. Roberts said the US would need to add between 250,000 and 300,000 jobs a month to achieve real reductions in the unemployment rate.
This week the Federal Reserve gave its latest update on the economy and explicitly blamed government policy for the slow pace of the recovery.This week the Federal Reserve gave its latest update on the economy and explicitly blamed government policy for the slow pace of the recovery.
After a two-day meeting, the Federal Open Markets Committee (FOMC) said on Wednesday that despite signs of recovery "fiscal policy is restraining economic growth".After a two-day meeting, the Federal Open Markets Committee (FOMC) said on Wednesday that despite signs of recovery "fiscal policy is restraining economic growth".
US stock market futures – an early indication of how the markets will react – soared after the nonfarm figures were released.