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U.S. Adds 290,000 Jobs in April; Rate Rises to 9.9%

The American economy continued to add jobs in April in a further sign that an economic recovery was on track.

Payrolls surged with an unexpectedly strong 290,000 jobs last month, the Labor Department reported on Friday, while the unemployment rate rose to 9.9 percent. “This is unambiguously a strong report for growth implications,” James O’Sullivan, chief economist at MF Global, said. “It adds to the evidence that the pickup in growth is leading to a clear-cut pickup in employment. It is very clear there has been a bounce here, and momentum has been up.”

With revisions on Friday, April was the fourth consecutive month that the economy added workers (a revised 230,000 jobs were added in March, instead of 162,000). Besides March, February was revised from a loss of 14,000 jobs to a gain of 39,000. With a January gain of 14,000, the cumulative increase came to 573,000 jobs in four months.

Even though the new gain in jobs exceeded analysts’ expectations of about 190,000 in the month, the job market still has a long way to go before it can be counted on to provide a base for a sustained recovery. More than 15.3 million were unemployed last month. There are still strains in the housing sector, pressure in financial markets, loss of wealth in households and big budget deficits.

“There is still a laundry list of issues the recovery is carrying on its back,” said Paul Ballew, chief economist with Nationwide. “The recovery has a lot of headwinds.”

“I would not describe the recovery as sprinting ahead,” he added. “I would describe the recovery as gaining momentum.”

Private employers added 231,000 jobs in April. Employment in the professional and business services sectors, leisure and hospitality, and the manufacturing industry continued to add jobs. The federal government added 66,000 temporary positions for the 2010 Census.

Despite the increase in jobs, the unemployment rate rose, mostly because the government said 195,000 workers re-entered the labor force after giving up on job hunting during the recession. When jobless people do not look for work, they are not counted in the official unemployment rate.

“Of course one of the headlines is that the unemployment rate rose, but the rise was more than accounted for by a surge in the labor force,” Mr. O’Sullivan said.

“So certainly as the economy recovers you will see the labor force show its usual cyclical bounce back,” he said. “I still think you will see the unemployment rate come down.”

Dan Greenhaus, chief economic strategist for Miller Tabak & Company, characterized the numbers as very good, “but it is not a perfect report.”

Some analyst said that there was still a reluctance by private businesses to resume former levels of hiring or to add new positions.

“There is little enthusiasm among owners to hire more workers, primarily due to continued weak sales trends,” said William C. Dunkelberg, chief economist for the National Federation of Independent Business, in a statement.

Mr. Greenhaus noted that average hourly earnings were flat and the number of people who had been unemployed for a long time expanded, he said. In April, 45.9 percent of all unemployed people had been jobless for 27 weeks or more, a record high, according to the Labor Department.

“Those metrics continue to show strains in the labor market,” Mr. Greenhaus said.

More than a 100,000 jobs a month are needed just to keep up with the growth of the working-age population, even without reducing the millions of Americans who are already unemployed. “We are looking at jobs growth in the vicinity of 150,000 to 175,000 per month going forward,” Peter Cardillo, chief market economist for Avalon Partners said. “That means the unemployment rate is going to stay on high level ground for a while.”

Still, Friday’s jobless data was the latest to contribute to a picture of a slowly improving economy, and analysts hoped the employment numbers would help to fuel the momentum of upturns in business confidence.

Recent economic data shows manufacturing picking up and government said that sector added 44,000 jobs in April. Since December, factory employment has risen by 101,000. Employment in professional and business services rose by 80,000, and 45,000 jobs were added in the leisure and hospitality sectors, which has grown by 121,000 jobs since December, mostly in food services work.

The overall economy has also continued to expand since last summer, reaching an inflation-adjusted annual rate of 3.2 percent in the last quarter. Retailers on Thursday reported a 0.5 percent increase in sales in April, and a 4.8 percent for the spring shopping season.

Economists estimated that there would be continued growth, particularly in the “bright spots” of the retail and manufacturing sectors, Mr. Greenhaus, said.

And the health and education sectors will continue to add jobs, said John Canally, an economist for LPL Financial. Health care added another 20,000 jobs in April and 244,000 in the last year.

As of yet, however, the improvements have not ushered in a sustained hiring. “I just don’t think the average person in the street thinks that we are even out of the recession, Mr. Canally said.

Retailers will also begin to add workers to recoup market share, Mr. Canally said, encouraged by an apparent willingness by consumers to spend their way out of the doldrums.

“Consumer spending has been way better than people thought,” Mr. Canally said.

Still, impediments exist. “The construction sector is still facing headwinds,” Mr. Greenhaus said. “A lot of the jobs that were lost are not coming back.” Construction added 14,000 jobs in April.

Taran Parsons, 24, of Charleston, W.Va., was one of many who turned to the Census Bureau when she could not find a job after college. She was hired last year as a “partnership specialist,” someone who contacts local organizations and governments to help prepare their communities to take part.

Ms. Parsons, who graduated last August with a master’s in labor relations from West Virginia University, said she found herself struggling to find work, and competing with more qualified applicants for human resources jobs.

“Coming out last year was a very difficult time,” she said. “A lot of positions in the H.R. field wanted three to five years of experience, and with the economy being what it was, there were a number of people laid off who had that experience.”

So for about $40,000 a year, the census job provided her with her first entry into the market, albeit one with a contract that expires in June. Many other Americans, however, continue looking for work, not to mention ways to pay their bills.

Antoinette F. Vitacco, a 53-year-old Queens woman, was supporting herself and her daughter as the supervisor at a New York call center in 2007 when her company downsized. In early 2008, she found herself unemployed, and for the first time in her life, on unemployment.

“I went from making $65,000 a year to making $430 a week,” said Ms. Vitacco. “I was never in the system as far as any food stamps. I don’t even know how to navigate that whole agency.”

In the last few months, she said has done some telemarketing, selling plots for a New Jersey cemetery. It is commission-only work, earning 1 percent for each plot she sells. In addition, her son gives her some money from his work in a deli. Between the two, she said, she has enough to cover some food costs.

The government figures show that there were 6.7 million people like Ms. Vitacco, who were unemployed for 27 weeks or more. In March that figure was 31.2 weeks, the longest period since 1948, when the government started to keep track of such records.

Ms. Vitacco said she has sent out 200 to 300 résumés in the last two years, tailoring each one to fit the potential job in a reflection of the varied professional life she has led. She has also worked as a loan originator in a bank, and a cosmetologist. But so far, she has been unable to find any work, she said, and her unemployment benefits ran out in April. She has no health insurance and she fears she is aging out of the work force.

“The longer you are unemployed the longer you stay unemployed,” she said. Employers ask “Well what have you been doing? Well, I have been looking for a job.”

“I would rather be out working and I can’t find anything,” Ms. Vitacco said. “It is not for lack of trying. The economy is broke.”

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Tags: economics, jobs
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