WASHINGTON (AP) — U.S. employers added 223,000 jobs in April, a solid gain that suggests that the economy may be recovering after stumbling at the start of the year.
The job growth helped lower the unemployment rate to 5.4 percent from 5.5 percent in March, the Labor Department said Friday. That is the lowest rate since May 2008, six months into the Great Recession.
The gains signal that companies are confident enough in their outlook to hire at a steady pace. The job growth could help fuel an economic rebound after a January-March quarter in which the U.S. economy is thought to have shrunk.
“Today’s report argues that the economy is in decent health,” says Scott Clemons, chief investment strategist at Brown Brothers Harriman Private Banking.
Still, Friday’s figures included signs of concern: A weak March job gain was revised sharply down to just 85,000 from 126,000. In the past three months, employers have added 191,000 positions, a decent gain but down from last year’s average of 260,000.
And the job growth isn’t yet raising worker pay much. Average hourly wages rose just 3 cents last month to $24.87. Wages are up 2.2 percent in the past 12 months, about the same tepid pace as the past six years.
Clemons said he was surprised by the meager gain in workers’ earnings. “Everything in this cycle has been slow-motion,” he said, referring to the modest recovery from the 2007-2009 Great Recession. “Maybe wages are another example of that.”
The Federal Reserve has been monitoring the job market for convincing evidence of a healthier economy. The sluggish pay growth and downward revision to March’s job gain may not be enough to lead the Fed to start raising interest rates from record lows.
The “Fed could be on hold forever with anemic numbers like these,” said Tom di Galoma, head of fixed income trading for ED&F Man Capital Markets.
Some trends that held back growth earlier this year were still evident in Friday’s jobs report. The mining industry, which includes oil and gas, cut 15,000 jobs in its fourth straight loss. Oil drilling has fallen sharply after last year’s plunge in oil prices.
Manufacturers gained only 1,000 jobs after a flat reading in March. That’s down from an average monthly job gain of 18,000 last year. The strengthened dollar, which makes U.S. exports costlier overseas, is slowing factory output.
Construction companies, however, picked up much of the slack, adding 45,000 jobs, the most in 16 months. The health care industry gained 56,000 jobs.
The figures add to other evidence that the economy may be gradually picking up. Home sales staged a big comeback in March, a sign more Americans are making expensive purchases. People bought existing homes at an annual pace of 5.19 million, the National Association of Realtors said.
Those gains are expected to extend into April based on figures on signed contracts released by the Realtors. This would help spur additional growth in the construction sector as builders seek to meet demand.
Americans also appear to be gradually stepping up their spending. Service firms such as restaurants, retailers and banks grew at a faster pace in April than in March, according to a survey by the Institute for Supply Management, a trade group of purchasing managers.
AP Economics Writers Josh Boak and Paul Wiseman contributed to this report.