US records strong rise in April employment

PUBLISHED : Saturday, 03 May, 2014, 4:00am
UPDATED : Monday, 05 May, 2014, 7:00pm

Employers in the United States boosted payrolls last month by the most in two years and the jobless rate fell to 6.3 per cent as companies grew confident the economy is emerging from a slowdown in the first quarter.

The 288,000 gain in employment was the biggest since January 2012 and followed a revised 203,000 increase in March that was stronger than initially estimated, labour department figures showed.

The median forecast in a survey of economists called for a 218,000 advance.

Unemployment dropped from 6.7 per cent to the lowest level since September 2008 as fewer people entered the labour force.

Wages and hours worked were stagnant.

Households spent more freely as the first quarter drew to a close and manufacturing accelerated, helping explain why companies such as Ford Motor are taking on more workers. The figures corroborate the Federal Reserve's view that the expansion is perking up after stagnating in the past quarter.

"The job market is starting to click on all cylinders - the engine is not running very fast, but all cylinders are moving," Robert Stein, a deputy chief economist at First Trust Portfolios, said before the report. For the Fed, it "fits right within their wheelhouse, and wouldn't alter in any way what they're likely to do."

Forecasts for last month's payrolls ranged from increases of 155,000 to 292,000, according to a survey of 94 economists.

Last year, the US added more than 194,000 jobs each month, compared with about 186,000 in 2012.

Fed policymakers at this week's meeting said the economy was showing signs of picking up and the job market was improving. The Fed's Open Market Committee pared its monthly asset-buying to US$45 billion, its fourth straight US$10 billion cut, and said further reductions in "measured steps" were likely.

Gross domestic product rose at a 0.1 per cent annualised rate from January to March, compared with a 2.6 per cent gain in the previous quarter, the Commerce Department said earlier this week.

"Growth in economic activity has picked up recently, after having slowed sharply," the Fed said after its meeting. "Household spending appears to be rising more quickly."

Manufacturers last month added the most jobs in five months and retailers took on the most workers this year.