Nonfarm businesses boosted payrolls by 244,000 jobs in April, significantly exceeding consensus private-sector expectations of 185,000 jobs. The growth came as private-sector firms added 268,000 jobs, the strongest one-month gain in half a decade. Indeed, private-sector employment is rising this year at a strong 2.4-percent annual rate, putting 2011’s growth pace on track to be the fastest since 1999. Partly offsetting private-sector gains were continued cutbacks by state and local governments, with overall government employment down by 24,000 over the month of April.
Revisions to the past two months’ job gains further strengthened today’s report. Overall, the Bureau of Labor Statistics (BLS) revised upward its last two months’ estimates by an additional 46,000 nonfarm jobs, meaning that there are actually 290,000 more jobs in the economy than was previously thought — 244,000 jobs in April + 46,000 in revisions. These numbers tell us that expectations strongly discounted the underlying strength of the economic expansion underway. They also echo two themes we have touched on recently in this blog – first, revisions often reinforce the underlying trends in the data, so positive job growth often is accompanied by positive revisions; and second, and more importantly, growth in gross domestic product (GDP) does not always move in sync with job growth. Thus, the slowing in real GDP growth from 3.1 percent at an annual rate in the fourth quarter to 1.8 percent in the first quarter does not necessarily mean that job growth will slow as well.
Private-sector hiring has also picked up at the same time that the number of temporary help jobs fell. Temp help employment edged down by 2,300 over the month, after springing up by 34,400 in March. The fact that these jobs did not pad April’s jobs numbers is a positive sign of firms’ desire to bring on new workers permanently.
The U.S. factory sector has fueled much of the recovery to date, and factories are adding back workers at a rate not seen in years. Manufacturing employment increased by 29,000 jobs in April and 197,000 jobs over the past year. Leading the way last month were the machinery manufacturing and fabricated metals sectors. But perhaps the best sign of our resurgent manufacturing industry is the breadth of job growth; over the past six months, the vast majority of the manufacturing sectors tracked by BLS have added workers.
Finally, today’s jobs report brings together the results of two labor market surveys: business payroll and households. So far, we have focused on the payroll numbers. The headline household numbers for April are less upbeat and trickier to interpret. The unemployment rate ticked up 0.2 percentage points to 9.0 percent as the number of jobless edged up to 13.7 million persons. Tons of ink (or toner) has been spilled examining why we should not place too much stock in month-to-month changes in the household survey data. Still, while the two surveys may be out of sync in April, overall they both point to a labor market expansion that is solid. The jobless rate is down 0.8 points from a year ago, and private-sector employment is up by a lot — 1.7 million jobs according to the payroll survey, and 1.5 million persons according to the household survey.
This administration’s focus on the economy and bold initiatives like the payroll tax cut and business incentives for investment are proving effective in creating an environment where businesses can hire again and support the development of 21st century industries.
~Mark Doms, Chief Economist, U.S. Department of Commerce
May 6, 2011
