United States: Payrolls growth stronger than expected, unemployment falls to pre-crisis levels
May 2, 2014
Non-farm payrolls grew by 288,000 in April, which was a jump up from March's upwardly revised increase of 203,000 (previously reported: +192,000). Moreover, the reading overshot market expectations of an increase in payrolls of 215,000 and represented the strongest gain since January 2012.
The private sector was almost entirely responsible for new hiring, having added 273,000 jobs in April. The largest gains were registered in professional and business services, retail, and construction. The public sector added just 15,000 jobs. The U.S. economy has recovered 8.6 million jobs since February 2010, which marked the trough in the labor market crisis, and has only 113,000 fewer jobs than it had at the January 2008 peak.
The unemployment rate-derived from a different survey-fell from 6.7% in March to 6.3% in April. The reading beat market expectations of a fall to 6.6% and marked the best result since September 2008. While stronger than expected payroll gains contributed to the drop in unemployment, the result was also driven by a decline in the labor force participation rate. In April, the participation rate fell from 63.2% in March to 62.8%, which is on par with the lowest level that was last recorded in 1978.
FocusEconomics Consensus Forecast panelists expect unemployment to average 6.4% this year, which is unchanged from last month's forecast. For 2015, the panel expects the unemployment rate to drop to 5.9%.
Author: Carl Kelly, Economist