Rather than reaching for the oxygen tank, the job market was yelling, "Put me in, coach!" last month. Instead of a spring swoon many expected, it was actually a steady showing, embraced by the financial markets.
The Labor Department delivered a surprisingly positive employment report for April. The jobless rate slipped to 7.5 percent from 7.6 percent. The unemployment rate is now at its lowest since December 2008. More attention-grabbing was the growth in payrolls. Employers added 165,000 jobs in April. The previously miserable March payrolls reading was revised up from 88,000 to 138,000 jobs and February topped 300,000 jobs added, with an upward revision of 64,000 from the previous report of 268,000 jobs.
Ken Mayland, with ClearView Economics, says of the revision, "The stupefying news a month ago of a scant 88,000 increase in payrolls turned out to be just stupid." His comment underscores why the Bureau of Labor Statistics constantly revises the data, working toward a more accurate picture of what's truly happening in the economy.
Where are the jobs?
Areas seeing job gains in April included business and professional services, food and drinking establishments, retail and health care. Government, construction and manufacturing were little changed. In the coming months, pressure from mandatory federal budget cuts is expected to have some negative impact on those areas as well.
The outlook -- still foggy
Two of the negatives hitting the economy this year have been mandatory federal budget cuts and an increase in payroll taxes. While they haven't taken the significant bite out of the economy that many feared might be seen by now, they remain risks.
Most potentially at risk is the consumer. But retail employment rose by 29,000 in April and has gained an average of 21,000 over the previous 12 months, according to the government.
Matthew Shay, president and CEO of the National Retail Federation, says in a statement: "While the overall impact of the payroll tax increase and sequester remain a significant concern, unease over taxes and spending and the upcoming debate on the debt ceiling in Congress may once again stymie business investment and consumer spending."
What does Uncle Ben think?
Much attention surrounded the Federal Reserve's statement, released Wednesday, specifically on the reference to the possibility that future asset purchases could be increased or reduced. Taken together with other recent reports, the new snapshot of the job market makes it more likely that the central bank, led by Chairman Ben Bernanke, sticks with its double-edged policy of record-low interest rates and $85 billion in monthly asset purchases.
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