Unemployment dropped a notch further to 7.5 percent last month as businesses created another 165,000 jobs, the Labor Department said Friday morning in a report that showed the economy maintained steady growth despite federal budget cuts.
While government jobs shrank by 11,000 during the month, businesses such as retailers, health providers and auto manufacturers added 186,000 new positions — providing close to the average number of jobs created each month in the past year.
Sharp upward revisions by the department also revealed that job growth in March was stronger at 138,000 than the originally reported weak figure of 88,000, while February job growth proved downright robust in retrospect, clocking in at 332,000 in the best performance of the nearly four-year-old recovery. In all, the department said 114,000 more jobs came open earlier this year than it originally estimated.
While job and wage growth remain depressed compared to past recoveries, Wall Street markets greeted April’s report with glee as it showed steady and healthy progress despite the deep recession in Europe and declining growth in China, Brazil and elsewhere around the world.
The Dow Jones Industrial Average shot up 150 points at the open of trading in New York a half-hour after the new numbers were released and was close to breaking the 15,000 mark for the first time ever. The broader S&P 500 index also moved into record territory, surpassing 1,600 for the first time.
With job growth picking up, wages also have moved modestly higher, rising by 4 cents an hour during the month and bringing the gain in the last year to 1.9 percent.
“Job growth is continuing at a nice clip…We have a nice little recovery that’s been ongoing” despite the government cutbacks and fears that the economy would fall once again into a “spring swoon” this year, said Betsy Stevenson, a former chief economist at the Labor Department.
“This report isn’t enough to conclude that the labor market recovery is accelerating,” but it’s “enough to hope” that a stronger recovery is on the way, she said.
The unemployment rate dropped to a four-year low in part because adult participation in the labor force remains at a record low 63.3 percent, she noted. Also, the 11,000 drop in government jobs does not include the thousands of temporary furloughs ordered as a result of $85 billion in across the board budget cuts, she said.
“It’s time to admit: The recovery has been remarkably persistent and resilient, though we may wish it were more rapid,” said Justin Wolfers, economist at the University of Michigan. He noted that the private sector has consistently added close to 200,000 jobs a month for the past three years despite many ups and downs in the broader global economy.
Chis Williamson, chief economist at Markit, noted, that so far this year, the U.S. economy has created an impressive 783,000 jobs.
“The news paints a far brighter picture of the U.S. labor market than the gloom that was beginning to pervade with the release of last month’s lackluster count,” he said.