Companies led the U.S. job market past a milestone in March as private employment exceeded its pre-recession peak for the first time, progress that will allow the Federal Reserve to stick to its policy course.
Payrolls excluding government agencies rose 192,000 after a 188,000 gain in February that was larger than first estimated, the Labor Department reported yesterday in Washington. That brought the job count to 116.1 million, beating the January 2008 high of 116 million. The jobless rate held at 6.7 percent even as half a million Americans entered the workforce.
Retailers, builders and health-care providers were among the industries hiring as the economy shook off the effects of harsh winter weather that curbed growth at the start of the year. The data mean Fed Chair Janet Yellen and her colleagues will probably keep trimming bond purchases while refraining from raising interest rates in the near term.
“As the speed of improvement in the labor market continues, all the things she’s looking at are going to get better,” said Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York. “Economic conditions continue to improve.”
The Labor Department report showed 503,000 people entered the workforce in March and almost as many found jobs. The participation rate -- the share of working-age people with a job or looking for one -- increased to 63.2 percent from 63 percent a month earlier.
The median forecast in a Bloomberg survey of 90 economists projected a 200,000 advance in payrolls. Forecasts ranged from increases of 150,000 to 275,000 after a previously reported 175,000 February gain. On average, the U.S. added 194,000 jobs a month in 2013 and 186,000 in 2012.
The number of people employed as a share of the working-age population grew to 58.9 percent, the highest since August 2009.
Private employers accounted for all of last month’s job creation as government agencies held off hiring. The gain in total payrolls followed a larger-than-previously reported increase of 197,000 in February. Revisions added 37,000 jobs to the previous two months.
The report found 698,000 discouraged job-seekers, the fewest since March 2009. The number of part-time workers increased.
At the same time, the report showed the labor-market recovery is not without soft spots. The number of people working part-time for economic reasons increased by 225,000 to 7.4 million, a three-month high. The agency’s broadest measure of labor-market health, which tallies the share of the unemployed, marginally attached workers and part-time help who desire full-time work, weakened from a month earlier.
Yellen highlighted those contradictions in a March 31 speech, saying that the recovery “still feels like a recession to many Americans.”
“The numbers of people who have been trying to find work for more than six months or more than a year are much higher today than they ever were since records began decades ago,” Yellen said at a conference in Chicago. “While there has been steady progress, there is also no doubt that the economy and the job market are not back to normal health.”
Fed policy makers last month reiterated their intent to reduce asset purchases “in further measured steps” after trimming the pace of bond buying by $10 billion a month to $55 billion.
Faster employment growth would help stoke wage gains and energize households, whose spending accounts for almost 70 percent of the economy. Hourly earnings were little changed at $24.30 on average compared with $24.31 in February, yesterday’s report showed. Earnings were up 2.1 percent over the past 12 months after increasing 2.2 percent in the year ended February.
After Courtney Smith survived two rounds of firings at a food sales and marketing company, she began looking for a job with more security.
It took a year and dozens of interviews before Smith, 33, landed at Boston-based Flashnotes.com, a marketplace where college students can buy and sell class notes and study guides. Smith started work March 5 as a campus recruitment coordinator for the start-up, which recently won $3.6 million in new funding.
“I was lucky enough to be employed while looking,” Smith said. “People who are working can find other jobs, but I think when they’re unemployed it’s still really, really hard.” Many friends laid off by her previous employer 10 months ago still haven’t found work, she said.
Accounting firm Ernst & Young LLP plans to increase hiring this year by almost 22 percent, said Dan Black, director of recruiting for the Americas. The New York-based company will recruit 12,700 employees, including 7,200 recent college graduates.
“Not only are we back to pre-recession level, this is the largest number of hires we’ve ever made in the United States,” Black said. “When you see growth like that, for me, and for us, that’s an indicator of something positive. We’re seeing a lot of demand here.”
Including government agencies, the U.S. has recovered all but 437,000 of the 8.7 million jobs lost as a result of the last recession.
Recent data have pointed to a thaw in the economy as temperatures began to warm. An April 3 report showed service industries, which account for almost 90 percent of the economy, improved and more companies said they were adding to headcount.
Ford Motor Co., Chrysler LLC and General Motors Co. reported March sales that beat analysts’ estimates as consumers, whose confidence is at a six-year high, returned to auto showrooms.
Cars and light trucks sold at a 16.33 million annualized rate in March, the strongest since May 2007, according to Ward’s Automotive Group.
To contact the reporter on this story: Lorraine Woellert in Washington at email@example.com