Jobs up 290,000 in April; jobless rate 9.9%

UPDATED:

The economic recovery strengthened and produced jobs for a fifth straight month in April, with the pace of job growth picking up to 290,000 from 230,000 in March, the Labor Department reported Friday morning.

With new jobs now available for the first time in two years, thousands of discouraged job-hunters surged back into the labor force looking for work, driving up the unemployment rate to 9.9 percent from 9.7 percent.

The labor force increased by 805,000 as people resumed their job search work, but only 550,000 of the job-hunters reported that they found jobs in the department’s survey of households last month.

Employers have created 573,000 jobs since December, more than previously reported, with most of that in the last two months, the department said. The job revival has been broad, occurring in nearly every industry from manufacturing to health care and business services.

“Hidden workers are coming back into the work force,” prompted by growing optimism about finding jobs, said John Silvia, chief economist at Wells Fargo Securities.

“A sustainable recovery is in place — no double-dip recession is likely,” he said. “We have a long way to go to full recovery, but the path of job gains is in train.”

President Obama called the addition of 290,000 jobs in April “very encouraging news.” But he said much remains to be done to get Americans back to work.

The good news was an elixir to the stock market, which had its most troubled day in history on Thursday, with the Dow Jones Industrial Average plummeting at one point by 1,000 points. Stocks were up modestly at the open of New York trading after the employment report Friday morning.

In recent months, the job gains have been strong enough to eventually bring down the unemployment rate, economists said. But because many people were discouraged from looking for jobs during the long recession, and millions of other were working at lower-paying or part-time jobs to make do, it will take a good deal of time to draw down the unemployment rate, they said.

“Unemployment is closer to 20 percent” when you add in discouraged workers and people working less than they would like, said Peter Morici, business professor at the University of Maryland.

“The economy and private business sector must grow at better than 3 percent a year to bring unemployment down, and that is a tough challenge,” he said. “Slow growing private demand — less than 2 percent — is the big problem” because it’s not enough to prompt businesses to add many workers, he said.

“Consumers are spending again, but at a more moderate pace and are not likely to return to their free-wheeling borrowing of years past.”

“All in all, this report is good news and shows healthy job growth in the private sector,” said Heidi Shierholz, economist at the Employment Policy Institute. “However, there is still an enormous shortage of jobs” since the recession destroyed about 8.4 million jobs, she said. “To end this job shortage, we will need job growth at least as fast as this month’s to persist for the next four or five years.”

Federal hiring for the 2010 census has added to the job boom since the beginning of the year, producing 66,000 openings last month. But growth in private jobs has led the revival with businesses creating 483,000 since December.

Temporary employment has been especially strong and was the first sector to start creating jobs. It has opened up 330,000 positions since September.

Working hours are also up, enabling people who have jobs to take home more pay. The average workweek rose by 0.1 hour to 33.4 hours in April. Wage gains remained tepid, however, at 1.6 percent in the last year.