Rebounding from a dismal start to the year, the U.S. economy added 223,000 jobs in April, a solid gain suggesting that employers are helping fuel a durable if still subpar recovery.
The job growth helped lower the unemployment rate to 5.4 percent from 5.5 percent in March, the Labor Department said Friday. That is the lowest rate since May 2008, six months into the Great Recession.
The figures provided some reassurance that the economy is recovering from a harsh winter and other temporary headwinds that may have caused it to shrink in the first three months of the year. Yet the bounceback appears to be falling short of hopes that growth would finally accelerate in 2015 and top 3 percent for the first time in a decade.
Most analysts foresee growth of about 2.5 percent this year, similar to the modest expansion typical of much of the 6-year-old recovery.
March’s job gain was revised sharply lower, to 85,000 from 126,000. In the past three months, employers have averaged adding 191,000 positions, a decent total but well below last year’s average of 260,000.
“Job growth is going from great to good,” said Michael Feroli, an economist at JPMorgan Chase.
Investors breathed a sigh of relief at the report, and the stock market had its best day in two months. The figures suggested an economic rebound from the first quarter, but one not so explosive as to cause the Federal Reserve to raise interest rates from record lows any time soon.
“I am even more convinced that the March report was an outlier,” said Paul Christopher, an investment strategist with Wells Fargo Advisors. “We all know the first quarter was a tough quarter. The jobs numbers needed to hold up and they did.”
The Dow Jones industrial average rose 267.05, or 1.5 percent, to 18,191.11. The Standard & Poor’s 500 index rose 28.10, or 1.4 percent, to 2,116.10, its biggest percentage gain since March 16. The Nasdaq composite rose 58.00, or 1.2 percent, to 5,003.55.
Both the Dow and S&P 500 ended fractionally higher for the week, while the Nasdaq ended down less than 0.1 percent.
One reason the economy hasn’t accelerated faster is that overseas economic turmoil is still holding back U.S. growth. A stronger dollar, which has made U.S. goods more expensive overseas, has cut into U.S. factory production. Manufacturers barely added jobs for a second straight month. And last year’s plunge in oil prices has caused drilling firms to lay off thousands of workers.
The nation’s job growth also still isn’t raising worker pay much. Average hourly wages rose just 3 cents in April to $24.87. Wages have risen only 2.2 percent over the past 12 months, roughly the same sluggish pace of the past six years.
Tara Sinclair, a professor at George Washington University and chief economist at the job listings service, said: “We’re definitely back to that same discussion we were having before March and earlier this year. Things are looking pretty good and going in the right direction, but where is the wage growth?”
Gains by sector
The 223,000 jobs added in April were spread unevenly among sectors. Here’s how several sectors fared, with the first number being job gains in April and the second being job gains in the past 12 months.
Construction: 45,000; 280,000
Manufacturing: 1,000; 180,000
Retail: 12,100; 284,900
Transportation, warehousing: 15,200; 164,200
Information (telecom, publishing): 3,000; 55,000
Financial services: 9,000; 151,000
Professional services (accounting, engineering, temp work): 62,000; 654,000
Education and health: 61,000; 564,000
Hotels, restaurants, entertainment: 17,000; 434,000
Government: 10,000; 64,000
Source: Labor Department