Business

Private sector adds jobs

WASHINGTON — A third straight month of strong private-sector hiring points to a firming of America's fragile economy, but experts caution that hurdles remain.

U.S. employers added a respectable 244,000 jobs in April, the Labor Department reported Friday, but that was tempered by a climb of two-tenths of a percentage point in the unemployment rate, to 9 percent.

Economists had expected the jobless rate to tick up as more of the unemployed returned to seek jobs in an accelerating recovery. But the labor force was largely unchanged in April, suggesting that returning workers didn't push up the jobless rate.

"It won't be a straight line up for the job market, but it is clearly headed up as businesses are increasingly focused on expanding their operations, which means more jobs," said Mark Zandi , the chief economist with forecaster Moody's Analytics.

"It will take longer for the unemployment rate to move definitively lower, given an expected pickup in labor force growth, but by this time next year unemployment should be moving consistently lower," Zandi said.

The April numbers would have been even stronger if not for the 24,000 government jobs lost during the month. Private-sector hiring for the month was pegged at 268,000.

Speaking at a factory in Indiana, President Obama welcomed the positive jobs report and said that, in a period slightly longer than a year, "We've added more than 2 million jobs in the private sector. Now, we've made this progress while our economy had been facing some serious headwinds."

April saw the best monthly private-sector hiring number since February 2006, and that bodes well for an economic recovery that has moved in fits and starts. April's numbers followed a robust 216,000 jobs added in March, a number that was revised upward on Friday.

"The job market continues to gain traction, with the gains increasingly broad-based across industries and regions of the country," Zandi said.

Retailers added 57,100 jobs, while white-collar jobs returned with professional and business services up by 51,000 positions. Leisure and hospitality, a category that's sensitive to economic trends, was up 46,000 jobs, while manufacturing added 29,000.

"This report is positive news for manufacturing, showing the recovery continues to move in the right direction with employment, with 250,000 net new jobs created since December 2009. However, we are not seeing as large of employment gains as we would hope to at this point in the recovery," said Chad Moutray, the chief economist for the National Association of Manufacturers.

Even the hard-hit construction sector added 5,000 jobs in April. Government was the only significant loser during the month, with state and local governments shedding 22,000 of the 24,000 jobs lost.

Friday's strong numbers followed a disappointing 1.8 percent annual economic growth rate from January through March. Soaring energy prices and Japan's devastating earthquake and tsunami slowed U.S. and global growth and may hit hiring in the quarter that runs from April through June.

"I think we're going to see some softer (hiring) numbers in May and June. I do think that the increase in commodity prices that we've seen this year have taken some toll on the consumer and to some extent on the willingness to hire," said Nigel Gault, the chief U.S. economist for forecaster IHS Global Insight.

To that end, the number of workers who've been jobless for five weeks or less increased by 242,000 in April, the Bureau of Labor Statistics said, a number that matches the uptick in first-time jobless claims in recent weeks.

The big question ahead is what happens to the prices of oil and gasoline. The nationwide average for a gallon of regular unleaded gasoline stood at $3.98 on Friday, a day after world oil prices tumbled $10 a barrel in trading on the New York Mercantile Exchange.

A year ago Friday, a gallon of gasoline sold for $2.92. The volatility in recent months leaves consumers and employers uncertain about energy prices later this year.

"I think what's crucial is that they stabilize somewhere around where they are now. If we stay in that sort of region, we should be OK. . . . We will be living with higher gasoline prices but we won't be seeing those prices moving higher," said Gault, who thinks that oil in the $130-a-barrel range spells a sharp economic slowdown. In trading Friday in New York, oil closed at around $97 a barrel.

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