Job market resilience eases growth concerns

Fri May 3, 2013 3:20pm EDT
 
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By Lucia Mutikani

WASHINGTON (Reuters) - Employment rose faster than expected in April and hiring was much stronger than previously thought in the prior two months, a sign of resilience that should help the economy absorb the blow from belt-tightening in Washington.

Nonfarm payrolls rose by 165,000 jobs last month and the unemployment rate fell to 7.5 percent, the lowest level since December 2008, the Labor Department said on Friday. The job counts for February and March were revised up by a net 114,000.

"This bolsters the case that the U.S. economy will be able to survive the combined headwinds of sequestration and a deepening recession in Europe," said Scott Anderson, chief economist at Bank of the West in San Francisco.

Investors on Wall Street cheered the data, which beat economists' expectations for a 145,000 jobs gain and a steady 7.6 percent reading on the unemployment rate.

U.S. stocks rallied, with the Standard & Poor's 500 index and the Dow Jones industrial average rising to intraday record highs. The dollar rose more than 1 percent against the yen, while Treasury debt prices fell.

Payrolls rose by 138,000 jobs in March, 50,000 more than previously reported, and job growth for February was revised up by 64,000 to 332,000, the largest increase since May 2010.

But the gains last month were far below the 206,000 jobs per month average of the first quarter, the latest evidence the economy is cooling, even if not as quickly as earlier feared.

Indeed, the data provided a number of signs of a loss of momentum.   Continued...

 
People wait in line to meet a job recruiter at the UJA-Federation Connect to Care job fair in New York March 6, 2013. REUTERS/Shannon Stapleton