Jobs Report Surprises with Very Strong Growth

By Toni Vranjes

May 2, 2014

The job market moved into the fast lane last month, with the pace of growth topping economists’ expectations.

Employers created 288,000 new jobs in April, the Labor Department reported today. The consensus expectation for the month was 210,000 jobs, according to IHS Global Insight. Over the previous 12 months, the monthly employment growth had averaged 190,000, the Labor Department stated.

down_arrow_6_pt_3Meanwhile, the report also included another surprise. Unemployment dropped to the lowest level in more than five years, falling from 6.7 percent to 6.3 percent. However, that occurred as the labor force declined by 806,000, and the labor-force participation rate dropped from 63.2 percent to 62.8 percent. The labor-force decline was the key factor pushing down the unemployment rate, according to an analysis written by IHS economist Doug Handler.

The brisk hiring was spread among many different industries. Professional and business services fared particularly well, gaining 75,000 new jobs. Retail trade was up by 35,000, and food services and drinking places added 33,000. Construction employment increased by 32,000, health care gained 19,000, and mining grew by 10,000.

In addition, the government revised job growth upward for previous months. The revisions show 203,000 jobs for March, rather than the 192,000 initially reported. February’s number changed from 197,000 to 222,000.

Another piece of good news: fewer people fall into the category of “long-term unemployed,” defined as those who have been out of work for 27 weeks or more. The prospects for this group are a particular concern, with research showing that they’re much less likely to hear back from employers when applying for a job. Last month, the number of people in this category fell by 287,000.

Overall, the report indicates that the job market is continuing to improve, according to Handler.

“Most major industry sectors saw significant improvements in employment levels,” he wrote. “No doubt that a portion of these gains were attributable to a catch-up from this winters poor weather, but the employment gains in many service industries not affected by the weather confirmed the underlying health of the economy.”

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