US Economy Records Bumper Jobs Growth In April
The US economy created 288,000 jobs in April, the strongest monthly job creation since January 2012.The largest jobs gain came in professional and business services, which added 75,000 jobs during the month.
The unemployment rate fell to 6.3%, according to the latest figures from the US Labor Department.
However, economists caution that figure was flattered by a sharp decline in the size of the labour force.
Nevertheless it is the lowest unemployment rate since September 2008.
“It’s a flat out good report. All of the metrics that you want to see improve, did,” said Tom Porcelli, chief US economist, RBC Capital Markets.
“The one thing I would be careful with though is the decline in the unemployment rate, the decline in the unemployment rate was a function of the labour force falling by 806,000, that is gargantuan decline,” he added.
There was also some disappointment over weak wage growth. Average hourly earnings in the private sector did not increase in April and over the past year wages are up a modest 1.9%.
The latest unemployment figures are another piece of evidence showing that the US economy is recovering from a harsh winter.
The weather was blamed for a sharp slowdown in US growth in the first quarter to an annual rate of 0.1%.
But economists say Friday’s strong job report underlines that the GDP figures released on Wednesday were an anomaly.
“It shows that the negative reading on GDP is something to be ignored,” said Russell Price, senior economist, Ameriprise Financial.
“Throughout this summer the economy will likely continue to gain traction, and we’re likely to see GDP numbers improve significantly… for the next two quarters at least,” he added.
On Wednesday, the US Federal Reserve continued to cut back its effort to boost the economy.
The central bank said it would trim its monthly bond purchases by an additional $10bn (£5.9bn) to $45bn.
The bank has been buying bonds to keep long-term interest rates low and stimulate economic activity.