The United States economy added far more jobs than expected in April, but with more than 13 million people still out of work, analysts cautioned that it was too early to say whether the momentum could be sustained for a full recovery in the labor market.
People in line to enter a job fair in New York last month.
The Labor Department said Friday that 244,000 jobs were added last month after a gain of a revised 221,000 in March. The unemployment rate rose to 9 percent in April from 8.8 percent in March.
“There are yellow warning flags that are popping up,” Joshua Shapiro, the chief United States economist for MFR Inc. “It remains to be seen whether this nascent recovery we are seeing is going to peter out or not.”
As has been the case for several months, all of the increase came from private employers, which added another 268,000 jobs last month on top of the revised 231,000 in March, the monthly report said. Results of the previous two months were revised to show another 46,000 jobs were added.
Governments, struggling to balance budgets as they deal with shrinking revenues and growing deficits, cut 24,000 jobs last month. Most of the drop came at the local level, where 14,000 jobs were lost in April after a decline of 15,000 in March.
April’s numbers exceeded the forecasts of analysts, who had expected a gain of 185,000 jobs over all, with the change in private payrolls of 200,000. The uptick in the unemployment rate that came even as employers were adding jobs was an indication that more people were entering the work force as hopes for hiring increased.
While better than expected, Friday’s numbers offered a few cautionary signs that the national economy had a long way to go. Though down from its peak of 10.1 percent in late 2009, April’s unemployment rate reflects only those Americans who are still actively looking for work.
As such, economists said the data in this month’s report showed a mixed picture. And recent data on initial jobless claims and other employment indicators have been weak, Mr. Shapiro said.
“Millions of people are unemployed and many have left the labor market and given up,” Mr. Shapiro said. “Against that we are maybe creating 244,000 jobs. That is all well and good but it just shows you how much further we have to go to make a dent into what has happened in the labor market.”
“It gets the basic debate out there about the economy,” he added. “Is all we have seen the product of government stimulus, and are all the problems coming back or not?”
Austan Goolsbee, chairman of President Obama’s Council of Economic Advisers, noted that the economy had added 2.1 million private sector jobs in the last 14 months, including more than 800,000 this year. The last three months of private jobs gains have been the strongest in five years, he said, despite the “headwinds” from higher energy prices and the Japan disaster.
But Mr. Goolsbee added a note of caution. “While the solid pace of employment growth in recent months is encouraging, faster growth is needed to replace the jobs lost in the downturn,” he said.
The latest snapshot covered a period when several indicators pointed to signs of weakness. The American economy grew at a tepid 1.8 percent in the first quarter, according to the government’s estimate for the first quarter. Personal consumption has slowed and construction remains weak, though winter weather was cited as a reason.
Turmoil in the Middle East and North Africa has sent crude oil prices higher, pushing up the cost of gasoline, which in turn has taken a larger share of the money consumers have to spend. Supply disruptions in the aftermath of the earthquake and tsunami in Japan have rippled through American industries, especially the automobile sector where plants have reduced production and idled workers.
John Canally, economist for LPL Financial, said that there was a marked difference between the April report of last year, when the economy was riven with uncertainty over the oil spill in the Gulf of Mexico and the European debt crisis.
“I think it is a sign that the economic recovery can continue. It is stronger than it was a year ago when we hit a wall,” Mr. Canally said. “This spring it looks like we went right through the wall, despite higher oil prices, and despite the Japan slowdown.”
Page 2 in New York Times
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