Employers boosted payrolls in April by the most in two years and the jobless rate plunged to 6.3 percent as companies grew confident the U.S. economy is emerging from a first-quarter slowdown.
The 288,000 gain in employment was the biggest since January 2012 and followed a revised 203,000 increase the prior month that was stronger than initially estimated, Labor Department figures showed today in Washington. The median forecast in a Bloomberg survey of economists called for a 218,000 advance. Unemployment dropped from 6.7 percent to the lowest level since September 2008 as fewer people entered the labor 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 Co. (F) are taking on more workers. The figures corroborate the Federal Reserve’s view that the expansion is perking up after stagnating last 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, deputy chief economist at First Trust Portfolios LP in Wheaton, Illinois, said before the report. His firm is the second-best forecaster of payroll growth for the past two years, according to data compiled by Bloomberg. For the Fed, it “fits right within their wheelhouse, and wouldn’t alter in any way what they’re likely to do.”
Forecasts for April payrolls ranged from increases of 155,000 to 292,000, according to the Bloomberg survey of 94 economists. Last year, the U.S. added more than 194,000 jobs each month, compared with about 186,000 in 2012. Economists surveyed by Bloomberg on April 4-9 project payroll gains to match 2013.