This morning’s news that 290,000 new jobs were created in April, while the unemployment rate rose to 9.9 percent, surprised economists who had been expecting a much smaller jobs growth.
Predictions had ranged from a low of about 180,000 to a high pushing 200,000. Most surveys expected the unemployment rate to remain at 9.7 percent, where it has been since January. Its increase, the U.S. Bureau of Labor Statistics report suggests, is probably due to the reentry of discouraged workers and others who had given up their job search. The government counts as unemployed only those individuals who are out of work and actively sought a job in the previous four weeks.
Some 800,000 workers joined the labor force in April. While pushing up the unemployment rate, it’s also a sign that workers may be feeling more optimistic about their job prospects. That optimism was reflected in last week’s increase in the Consumer Confidence Index and is rooted in the growing numbers of jobs being advertised, as evidenced by both the Monster Employment Index and The Conference Board’s monthly survey of online job postings.
Besides the April numbers, the BLS also adjusted upwards the numbers for March and February. The revisions changed February from a jobs loss to a 39,000 jobs gain. Now, under the revised numbers, the U.S. has added 573,000 jobs.
The other surprise in today’s BLS report is that most of the new jobs came from the private sector and not as a result of the hiring of thousands of temporary new census workers. Census hiring accounted for 66,000 of the new jobs, far less than the 100,000 some economists had predicted.
The census hiring was rivaled by a 44,000 increase in manufacturing jobs, due, in part, to improving auto sales. Even bigger were the gains in the professional and business services sector, which added 80,000 jobs. This category includes the accountants, managers, clerks, engineers, HR personnel, and others and is part of the service sector.
Most sectors of the economy showed growth. Only information (IT) and finance continued to show weakness, shedding 12,000 and 20,000 jobs respectively.
There were signs before the stock markets opened this morning that the strong domestic jobs report will temper investor jitters. Stock futures were trading somewhat higher before the opening.