Payrolls in U.S. Rise by Most in Four Years; Jobless Rate Climbs to 9.9%
Payrolls in the U.S. surged in April by the most in four years, led by gains in private employment that signal the economy is less dependent on government support.
The 290,000 increase in employment exceeded the median estimate of economists surveyed by Bloomberg News and followed a 230,000 gain in March that was larger than initially estimated. The jobless rate rose to 9.9 percent from 9.7 percent as thousands of jobseekers entered the workforce, a Labor Department report in Washington showed yesterday.
Private employers added 231,000 workers across the economy, from manufacturing to construction to services. General Electric Co. and Berkshire Hathaway Inc. are among companies adding staff in response to growing sales, indicating gains in consumer spending may spur more hiring.
“Economic growth is translating into a pickup in the labor market which makes the recovery more self-sustaining,” said James O’Sullivan, global chief economist at MF Global Ltd. in New York. “The strong upward momentum in the data through April should help absorb whatever drag comes from the turmoil in Europe.”
Financial markets worldwide were rattled this week on mounting concern European leaders won’t do enough to contain a fiscal crisis in Greece that threatens to engulf Portugal and Spain. The Dow Jones Industrial Average dropped 1.3 percent yesterday in New York, the fourth straight decline. The Standard & Poor’s 500 Index fell 1.5 percent.
Yesterday’s Labor Department report showed factory payrolls increased 44,000 in April, the biggest gain since August 1998, while service providers added 225,000 workers, the most since November 2006. Employment at builders increased for a second month.
“These numbers are particularly heartening when you consider where we were a year ago, with an economy in freefall,” President Barack Obama said yesterday. Still, “it’s going to take time to repair and rebuild” the damage from the recession and the financial crisis, he said at the White House.
GE, the world’s largest maker of jet engines, power- generation equipment and locomotives, increased the number of jobs it plans to add in Michigan to more than 1,300 with the creation of about 220 aerospace manufacturing positions, the Fairfield, Connecticut-based company said this week.
Overall payrolls were forecast to increase by 190,000 after a previously reported March gain of 162,000, according to the median estimate of 84 economists surveyed by Bloomberg.
The April gain included 66,000 temporary workers hired by the government to help conduct the 2010 census and a 231,000 rise in private payrolls.
“The hiring process has begun in the U.S.,” said Stefane Marion, chief economist at National Bank Financial Inc. in Montreal, who forecast a payrolls gain of 280,000. “We expect job creation to continue in the coming months.”
The unemployment rate may remain elevated as more people enter the labor force in search of work, one reason why the Federal Reserve is likely to keep its benchmark interest rate at a record low.
The jobless rate was projected to hold at 9.7 percent. The labor force grew 805,000 in April and employment increased 550,000, the Labor Department’s survey of households showed.
The gain in private payrolls was the fourth straight and followed a 174,000 increase in March that may have reflected, in part, a weather-related rebound from the prior month. Private employment was projected to climb by 100,000, according to the median forecast.
Federal government payrolls increased by 65,000 in April, while state and local governments reduced employment by 6,000.
The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- increased to 17.1 percent from 16.9 percent.
The report also showed an increase in long-term unemployed Americans. The number of people unemployed for 27 weeks or more rose as a percentage of all jobless, to a record 45.9 percent.
Billionaire Warren Buffett, whose Berkshire Hathaway cut more than 20,000 jobs last year, said his Omaha, Nebraska-based company is now adding staff as the economic recovery boosts demand at its industrial units.
“We do hire people when we have something for them to do,” Buffett told investors last week in Omaha, Nebraska, where Berkshire held its annual shareholders’ meeting. “We are a net hirer now.”
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