April Brings Strong Job Growth

By Toni Vranjes

May 6, 2011

The latest employment report may seem to be sending mixed messages — but economists who have analyzed it say the news is largely positive.

Payrolls rose by 244,000 last month, and job creation was spread across a number of industries. However, the jobless rate also increased, rising from 8.8 percent to 9 percent, the Labor Department reported today.

“Despite the fact that the unemployment rate went up, it was a good report,” says Nigel Gault, chief U.S. economist for IHS Global Insight.

The payroll numbers beat economists’ expectations. They had predicted that the economy would add 185,000 jobs last month.

The report might seem confusing — showing strong job growth along with higher unemployment — but keep in mind that the numbers are obtained from two separate surveys. The payroll numbers are based on a survey of employers, while the unemployment rate is derived from a survey of households.

In April, while the payroll survey showed an increase in employment, the household survey showed a drop in employment. The labor-force participation rate was unchanged.

The household numbers are much more volatile than the payroll numbers, and the payroll survey is a more reliable indicator of trends, Gault says. Although the two surveys may differ greatly in any given month, over the longer term they tend to paint a similar picture.

Meanwhile, economist Sophia Koropeckyj says the net gain of 244,000 jobs is encouraging.

“That is generally considered to be a healthy number,” says Koropeckyj, managing director for Moody’s Analytics.

She also was impressed by the broad-based employment growth. Gains occurred in retail trade, professional and business services, leisure and hospitality, health care, manufacturing and mining.

The Obama Administration emphasized the strong performance of the private sector, which created 268,000 new jobs last month.

“Despite headwinds from high energy prices and disruptions from the disaster in Japan, the last three months of private job gains have been the strongest in five years,” Austan Goolsbee, chair of the White House Council of Economic Advisers, wrote in a blog post.

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