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Originally published May 2, 2014 at 5:06 PM | Page modified May 2, 2014 at 7:57 PM

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Employers add 288K jobs in April, but data inconclusive

Usually a whopping four-tenths of a percentage point drop in the monthly unemployment rate would be cause for cheer. Instead, it prompted head-scratching Friday.


McClatchy Washington Bureau

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WASHINGTON — With a punishing winter behind them, employers added a sizzling 288,000 jobs in April, the government said Friday in a report that also saw a confusingly sharp drop in the unemployment rate to 6.3 percent.

The jobs report came days after the Commerce Department reported nearly flatline annual growth of just 0.1 percent for the first three months of 2014. Most mainstream economists blamed that on the harsh winter weather, which weighed on hiring from December through February, and they predicted a comeback.

And there was ample evidence of that Friday. Powering the strong monthly growth was the white-collar professional and business services sector, adding 75,000 jobs in April. The hard-hit construction industry bounced back, adding 32,000 new jobs in the month. Retailers, also hit hard by the winter weather, increased payrolls by almost 35,000.

Previous hiring estimates by the Labor Department for February and March were revised upward by a combined 36,000, furthering the view of an improving jobs market.

“The job market is kicking into a higher gear. It is still far from running at full speed, but the trend lines are good,” said Mark Zandi, the chief economist for forecaster Moody’s Analytics. “The gains are broad across industries, regions and pay scales. The job market feels better and better.”

Because the job gains were solid across all major sectors covered in the government survey, it suggests that growth is coming along evenly across the economy.

The strong hiring also had economists boosting their growth forecasts for coming months.

“The report fits in nicely with our stronger growth outlook for the second quarter and over the balance of the year,” said Scott Anderson, the chief economist for Bank of the West in San Francisco.

Usually a whopping four-tenths of a percentage point drop in the monthly unemployment rate would be cause for cheer. Instead, it prompted head-scratching Friday.

“Helpful headlines, but disappointing details,” said the headline of an analysis by Bank of America Merrill Lynch economist Michelle Meyer.

It’s why financial markets looked past the strong jobs numbers Friday and viewed the entire report with more caution.

“The headline number was strong, with healthy gains in nonfarm payroll growth and a sharp decline in the unemployment rate,” said Chad Moutray, the chief economist for the National Association of Manufacturers, noting that his sector continues to add jobs. “Yet the data also show that the participation rate remains at a 30-year low, and manufacturing hours and compensation were somewhat down for the month.”

Even the Bureau of Labor Statistics weighed in, noting in the report that the “participation rate has shown no clear trend in recent months and currently is the same as it was this past October.”



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