U.S. adds 288,000 jobs in April

WASHINGTON — The labor market heated up last month, producing a bumper crop of 288,000 new jobs — the most in more than two years — and easing fears that a winter slowdown in hiring foreshadowed another downturn in the uneven recovery.

The surge in hiring, reported by the government Friday, pushed the number of unemployed workers below 10 million for the first time since the 2008 financial crisis. The unemployment rate fell sharply to 6.3%, the lowest level in more than 5 1/2 years.

But economists warned that the economy still doesn’t appear to be strong enough to sustain April’s robust pace of job creation, which included construction companies and other firms catching up on hiring after a lull caused by unusually harsh weather.

And the Labor Department report contained some troubling data showing the job market remains a ways from fully healed.

“More than likely, April was a bit of a rogue month,” said Brian Bethune, chief economist at Alpha Economics Foresights. “There’s no reason for any sudden sense that we’ve risen above the turbulence.”

Average hourly earnings were flat in April and were up just 1.9% over the previous 12 months, meaning workers’ wages aren’t increasing much. The length of the average workweek also was unchanged.

The most significant warning sign was a large decrease in the labor force last month, which was the main reason the unemployment rate tumbled from the March level of 6.7%.

The last time the rate was lower was September 2008.

The civilian labor force shrank by 806,000 in April after rising by about half a million in March. And the percentage of working-age Americans who had jobs or were actively looking for them — the labor force participation rate — fell to 62.8% last month, the lowest level since 1978.

“It’s something we need to worry about,” Diane Swonk, chief economist at Mesirow Financial, said of the labor force data.

In the past, the labor force has fallen because unemployed workers have gotten discouraged and stopped looking for jobs. This time, the labor force declined mostly because fewer people entered the job force — such as young people and immigrants looking for their first job.

The drop in the labor force muted investor reaction to the jobs report.

The Dow Jones industrial average initially shot to a record high in early trading before quickly falling into negative territory. It closed at 16,512.57, down 46.30, or 0.28%.

“The immediate reaction was, ‘That’s quite impressive,’” Chris Beauchamp, a market analyst at financial trading firm IG, said of the jobs report. “The headline was great. The unemployment rate was down. But the labor force was weakening as well.”

Still, the large increase in job growth was a positive sign.

“I literally said, ‘OMG’ when this report came out,” said Mark Hamrick, Washington bureau chief of Bankrate.com, a financial information website.

The April figure was a major increase from March’s 203,000 gain in jobs, which was revised up. Overall, the Labor Department said there were a total of 36,000 more jobs created in February and March than initially estimated.

“The grit and determination of the American people are moving us forward, but we have to keep a relentless focus on job creation,” President Obama said Friday as the White House touted the 50^th straight month of private sector job growth.

Obama again called for Congress to do more to help the recovery by raising the federal minimum wage and approving new infrastructure spending to increase construction hiring.

The private sector added 273,000 jobs last month, with broad-based gains. Professional and business services firms increased their payrolls by 75,000, retailers by 35,000 and construction companies by 32,000.

Construction hiring has varied widely in recent months with the weather, which affects the industry more than many others. April’s job creation in the sector was nearly double the 17,000 positions added in March.

Federal, state and local governments also added 15,000 positions.

Economists had expected more modest overall job growth, forecasting 215,000 net new positions would be added in April and the unemployment rate would drop just a tenth of a percentage point to 6.6%.

Overall, the economy is close to recovering all the jobs lost in the Great Recession. The total number of jobs in April was 113,000 less than the peak in January 2008, just as the recession started.

The strong report was welcomed after job growth slid in December and January as extreme cold and snow hit much of the nation.

After adding 274,000 jobs in November, the economy saw job creation sputter to 84,000 in December and 144,000 in January. The Commerce Department reported this week that the economy had one of its weakest performances since the recession in the first three months of the year, expanding at just a 0.1% annual rate.

April’s hiring spree gave some economists confidence that an acceleration in the recovery, which had been forecast heading into the year, was starting to take place.

“To put it in a baseball analogy, the economy was down in the count after having a lousy few months. Now it’s had a hit — a double,” said Stuart Hoffman, chief economist at PNC Bank. “The good news is the economy didn’t strike out.”

jim.puzzanghera@latimes.com