The seemingly impossible can happen. The Boston Red Sox won the World Series after trading Babe Ruth. Twice, in fact. Snow flurries once fell in Miami. And now the U.S. economy has created jobs for three straight months, adding 290,000 jobs in April after a 230,000 gain in March, the U.S. Labor Department announced Friday. Even excluding the temporary workers hired by the U.S. Census, the economy added 224,000 jobs in April.
And don't let the fact that the unemployment rose to 9.9% from 9.7% in March get you down: It most likely reflects optimism on the part of unemployed Americans, more of whom resumed their job searches again as more openings appeared.
Economists surveyed by Bloomberg News economists had expected the U.S. economy to add only 200,000 jobs in April, after a revised 230,000 job gain in March, up from the previously-released 162,000 job gain. The economy added a revised 39,000 jobs in February.
Also, a separate unemployment gauge, which includes workers who can find only part-time work and discouraged workers, rose to 17.1% in April from 16.9% in March.
A Self-Sustaining Recovery?
While April's 290,000 job gain does not erase the 8 million-plus jobs lost in the recession, the trend for the past 12 months is clear, as institutional investors will quickly underscore: a healing job market, with the U.S. economy progressing toward a self-sustaining expansion.
In April, jobs growth was visible across nearly the entire economic spectrum. Professional/business services added 80,000 jobs, leisure/hospitality, 45,000; manufacturing added 44,000; health care, 20,000; and construction, 14,000. Also, 26,000 temporary jobs were added in April, which brought the total number of temporary jobs added since September 2009 to 330,000. Historically, gains in temporary jobs have usually signaled growth in permanent jobs in the months ahead.
Also, average hourly earnings for rose 1 cent to $22.47 in April, and the average workweek rose by 0.1 hour to 34.1 hours.
The better than expected 290,000 job gain will help bolster the case of the market's bulls, who are still smarting after Greek/European debt concerns added momentum to Thursday's (apparently glitch-triggered) wild downward slide in the Dow, which ended with the index recording a 348 point loss.
For investors, the return of adequate job growth is good news: It would be hard for a sustained U.S. economic expansion to occur without job growth. And a sustained expansion is a prerequisite for enduring earnings growth, which is the basis for stock market gains.
In general, economists like to see three months in a row of strong job gains (more than 150,000), before they bless the trend, but investors can interpret the April report and the revised higher March total as unqualified positives -- the best news the U.S. economy has received in more than a year. It does not ensure economic growth will accelerate, but April's data provides further evidence that the final piece of the economic recovery puzzle -- job growth -- has been found.
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