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april jobs report
Jeri Clausing/AP
By Lucia Mutikani

WASHINGTON -- U.S. job growth increased at its fastest pace in more than two years in April, suggesting a sharp rebound in economic activity early in the second quarter.

Nonfarm payrolls surged 288,000 last month, the Labor Department said Friday. That was the largest gain since January 2012 and beat Wall Street's expectations for an increase of 210,000. March and February data were revised to show 36,000 more jobs than previously reported.

"The economy really has strong underlying fundamentals supporting its growth. Temporary headwinds such as the bad weather can be certainly managed," said Russell Price, senior economist at Ameriprise Financial in Troy, Michigan.

Still, the report did give some worrisome signals on the economy's health.

While the unemployment rate dived 0.4 percentage point to a 5½ year low of 6.3 percent, part of the decline was because hundreds of thousands of people left the labor force.

Overall, however, the data suggested the economy was gathering strength and led investors to pull forward their bets on when the Federal Reserve will raise interest rates.

U.S. Treasury debt yields soared after the report, while the dollar jumped to session highs against the euro and the yen. U.S. stock prices rose marginally.

Bets on U.S. short-term interest rates suggested Wall Street is now pricing in a Fed rate hike in June 2015, based on CME FedWatch, which tracks rate hike expectations using its Fed funds futures contracts. Before the jobs data was released, the Fed was seen raising rates in July of that year.

The employment report joins other upbeat data such as consumer spending and industrial production in suggesting that sputtering growth in the first quarter was an aberration, weighed down by an unusually cold and disruptive winter.

The Fed on Wednesday shrugged off the dismal first quarter performance. The U.S. central bank, which announced further reductions to the amount of money it is pumping into the economy through monthly bond purchases, said indications were that "growth in economic activity has picked up recently."

Economists expect second-quarter growth to top a 3 percent pace.

Household Survey Mixed

While details of the bigger survey of employers were robust, the smaller and volatile household survey from which the unemployment rate is calculated was mixed, with household employment falling slightly.

The labor force also declined by 806,000 people.

"That is gargantuan decline," said Tom Porcelli, an economist at RBC Capital Markets in New York.

The labor force participation rate, or the share of working-age Americans who are employed and unemployed but looking for a job, fell 0.4 percentage point to 62.8 percent. That was the lowest level since last December.

Some of the 1.35 million people who lost their longer-term unemployment benefits at the end of last December may have dropped out of the labor force last month.

But a broad measure of unemployment, which includes people who want to work but have stopped looking and those working only part time but who want more work, fell to a 20-year low of 12.3 percent in April. It was at 12.7 percent in March.

Employment gains in April were broad-based, with the private sector adding 273,000 jobs and government payrolls rising 15,000. Manufacturing employment increased 12,000 after rising by 7,000 in March.

Construction payrolls gained 32,000. That followed an increase of 17,000 jobs in March. The hiring trend could slow in the months ahead as residential construction loses some steam.

Average hourly earnings were flat in April. The length of the workweek held steady at 34.5 hours last month after bouncing back in March from its winter-depressed levels.

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Where's Mr Wilson? Gosh oh gee I hope he doesn't run out of Grey Pupon.

May 02 2014 at 6:14 PM Report abuse -2 rate up rate down Reply

The annual average employed for 2007 was 146.046 million but since that time the population of 16 and over has grown dramatically causing the spill over in not in the laborforce as it sits now.

May 02 2014 at 6:05 PM Report abuse -1 rate up rate down Reply

When our troops come home they will walk into a decimated workplace where businesses either need manual laborers or imported technology workers ect. Being aged 30 to 35 is not the time to try to become an expert in engineering or other complicated field from scratch. The depth of all workers aging and looking to find work has them all heading into retail and other service occupations where there is an over supply of applicants.

May 02 2014 at 4:43 PM Report abuse +1 rate up rate down Reply

Well, I saw a report on CBS today that said the real number is close to 92 million (out of work). But you know what, does it matter? Survival of the fittest! Sure, the economy is bad, but there is no use complaining about it. Most of the unemployed are not employed because they are not valuable assets. Until you know how to program, speak multiple languages, fix things, and/or have some actual skill, you can't complain.

Many American have a steak taste on a hamburger budget . That's part of the problem we now face from a long time ago. They feel entitled to a job, a house, a high salary, etc... They borrow to the max and then whine about now having enough money . Nice house , car or truck and boat. Can you afford them or does it really matter at this period of time?

Me - I'm going to constantly educate/improve myself. I’m going to rent until I have enough money to buy a comparable place in full. And only when I find a place I want to spend the rest of my life in.

While waiting for that, I will make smart decisions with my money:

1) Paying off my debts as they come to me. Never holding a credit card balance longer than a month. If this means living in a small studio apartment and eating ramen, rice, and beans, so be it.

2) I will always buy small, fuel efficient and durable cars. I drive a 2006 Honda Civic now. It costs me nothing to fill up and next to nothing to insure ($25/month from 4AutoInsuranceQuote… woohoo!). I will not drive when I don’t need to, and use public transportation whenever possible.

3) Developing multiple revenue streams. Doing side jobs. Building up small businesses. Doing contract work. Basically doing whatever I can to generate income from multiple sources.

4) Grow my revenue and assets no matter what. Make sure I am always expanding and develop them to the point that they consistently generate reliable cash flow.

5) I need life insurance to protect my daughter, but I ditched a $275 a month whole life policy for a policy from LifeAnt and now I only spend $25 a month. I save the difference to my Roth IRA.

6) The most important one - make as much as I can. Save as much as I can.

May 02 2014 at 4:43 PM Report abuse +1 rate up rate down Reply
1 reply to kuqiqogaros's comment

You sound like your younger than 55 an don't have to worry about losing a trade an finding only hard labor type jobs ect.

May 02 2014 at 5:08 PM Report abuse rate up rate down Reply

It's dangerous assuming these people no longer want jobs. Many of the older unemployed can't unload freight manually or pull heavy pallets of freight repeatedly over long distances as some cruel ignorant box store managers would have them do.

May 02 2014 at 4:34 PM Report abuse +4 rate up rate down Reply

And the U-6 unemployment still sits at 13%, something doesn't make sense. Wall Street reacted negatively on this news.

May 02 2014 at 3:07 PM Report abuse +5 rate up rate down Reply
1 reply to David's comment

You mean they acted like they care because they still have their Mercedes and upper income jobs.

May 02 2014 at 4:47 PM Report abuse +2 rate up rate down Reply

The Russians must think all the missing people from the labor data are gathering on the Easter front.

May 02 2014 at 2:19 PM Report abuse +1 rate up rate down Reply

But a group that includes leading Wall Street and Federal Reserve economists says the drop in workforce participation is about demographics, not the health of the economy. Mostly, it's about Baby Boomers.

About 76% of those leaving the workforce in 2013 last year represented people over age 55 who say they don't want jobs, the Labor Department estimates.

"Arithmetically, the Boomers will keep pushing (participation) down done for another 15 years," said Dean Maki, economist at investment bank Barclays, who argues Boomers' retirements mean current job growth can reduce unemployment. "We should get used to it."

Indeed, participation began dropping years before the recession, and U.S. labor-participation rates are still higher than in most developed economies.

In 1948, 59% of adults were in the work force. The rate surged as Boomers grew up and the percentage of women who worked nearly doubled, peaking at 67.3% in 2000.

A decline in "discouraged workers," who have quit looking because they think they can't find work, also points to economic confidence, Brookings Institution economist Justin Wolfers said. Discouraged workers have dropped by 151,000 in the last year to 917,000.

Even among workers too young to retire, it's not clear the economy is inducing many to leave the job market, Maki said. Other reasons include staying in school or family responsibilities. The number of 25- to 54-year-olds out of the labor force who want to work fell by about 90,000 in the last year, to 2.7 million. Among 16- to 24-year-olds, those out of the work force but who say they want a job dropped 14% to 1.8 million.

May 02 2014 at 2:18 PM Report abuse +2 rate up rate down Reply
2 replies to republicanslostagain's comment

Once again the narrow minded right wing nut jobs only see part of the picture.

May 02 2014 at 2:20 PM Report abuse +1 rate up rate down Reply

You mean age 55 are so rich they can retire not having even reached the earliest age of retirement which is 62. It's 65 for max benefits for some born earlier and 66 for me.

May 02 2014 at 4:26 PM Report abuse +1 rate up rate down Reply

Republicans worst nightmare

May 02 2014 at 1:37 PM Report abuse +4 rate up rate down Reply
1 reply to Jim's comment
Leroy Gd

What is republicans worse nightmare jimmy, that 800,000 people gave up looking for work last month or that over 70% of the jobs added were part time jobs?
As you can tell folks jimmy is one of the numb nut lefty liberals
nonthinkers who still adores our liar in chief and still believes the lies the news excrement such as huff puff/aol spreads.

May 02 2014 at 1:52 PM Report abuse -2 rate up rate down Reply
Leroy Gd

Why is it that the main stream media, such as the excrement spreaders like the huff puff/aol don't mention that over 70% of those jobs are part time jobs? Why is there no mention that 800,000 people gave up looking for work in April?
Yes the economy is doing just great, i hope all of the numb nut lefty liberals go out and party tonight because of this great news. Such stupid plebs that they are.

May 02 2014 at 1:36 PM Report abuse -3 rate up rate down Reply