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The economy adds 211K jobs in April


The economy added 211,000 jobs in April,  the U.S. Department of Labor reported, reversing weak March numbers and quieting fears that a recession is looming.

The unemployment rate ticked down slightly to 4.4 percent and wages moved up, even as more Americans have been out looking for work.

jobadds“The pickup in hiring in the April jobs report supports the popular view that March’s weak headline was a weather-induced slowdown,” Fannie Mae Chief Economist Doug Duncan said. “The trend in nonfarm payrolls so far this year points to a steady improvement in job gains, propelling the labor market further into full-employment territory.”

The job additions in March and February were revised down by 6,000 jobs. The March estimate fell to 79,000 from 98,000, but February’s figure was boosted by 13,000 jobs to 232,000. The disappointing March number was coupled with weak real gross domestic product growth of 0.7 percent in the first quarter. 

Duncan said the stronger April showing should keep the Federal Reserve on course for two additional quarter-percent rate increases in 2017, and also prompt Fed officials to alter the policy of maintaining massive holdings of mortgage-backed securities.

The Federal Open Market Committee has indicated that it will eventually scale down its investment portfolio by allowing MBS holdings to start rolling off its balance sheets, a move that is expected to push long-term rates higher.

Another sign of the better times for the labor market is that more Americans have been out looking for jobs. The number of discouraged workers who haven’t looked for a job in four weeks because they don’t think they’ll find one has fallen to 455,000, down by 113,000 from a year ago.

“The message from today’s report is clear: The labor market is tight, with continued declines in discouraged workers and part-timers who prefer full-time jobs,” Duncan said. “The report is consistent with a faster pace of monetary policy normalization this year and supports our expectation of two rate hikes in June and September and a change in the Fed’s reinvestment policy in December.”

 Around the sectors 

Sectors that saw big gains in April included leisure and hospitality, 55,000 job additions; business and professional services, 39,000; health care and social services, 37,000; and financial services, 19,000. The mining industry, which shed thousands of jobs with the decline in oil prices, added 9,000 jobs, and has added 44,000 since October, three quarters of which have been in mining-support services.

Job growth in the construction sector was disappointing, said Mark Fleming, chief economist with First American Corp.

“This month’s increase of 5,000 jobs is only a 2.6 percent increase from a year ago,” Fleming said. “Homebuilders are reporting that the lack of construction workers is hampering their ability to increase production, which is a desperately needed source of supply, as most markets already have very tight inventories of homes for sale. In fact, we have been underbuilding residential housing relative to demand since 2009.”

Overall average hourly wages ticked up 7 cents, to $26.19. Over the year, average hourly earnings have risen by 65 cents, or 2.5 percent, the Labor Department reported.

“This good jobs report for April should dispel any notion of a potential economic recession,” National Association of Realtors Chief Economist Lawrence Yun said. “Moreover, the continuing low levels of people filing for unemployment checks, as well as the high numbers of job openings, do point towards further job additions in upcoming months.”


 

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