Employment picked up more than forecast in April and the jobless rate unexpectedly declined to a four-year low of 7.5 percent, showing employers are confident about the economic outlook in the face of federal budget cuts.
Payrolls expanded by 165,000 workers last month following a revised 138,000 increase in March that was larger than first estimated, Labor Department figures showed today in Washington. The median forecast of 90 economists surveyed by Bloomberg projected a 140,000 gain. Revisions added a total of 114,000 jobs to the employment count in February and March.
Stocks rallied, sending the Standard & Poor’s 500 Index above 1,600 for the first time, as the report tempered expectations of a second-quarter slowdown. Hiring advanced last month even as employers witnessed the onset of planned government spending reductions, which the Federal Reserve said are hindering growth.
“The demise of this recovery is grossly exaggerated,” said Eric Green, global head of research at TD Securities Inc. in New York, who forecast a 162,000 gain in payrolls. “We’re still in a soft patch, but the job market is not falling apart. The U.S. labor market is in much better shape than most people feared.”
The S&P 500 jumped 1.1 percent to 1,615.37 at 9:43 a.m. in New York. The yield on the benchmark 10-year Treasury note rose eight basis points, or 0.08 percentage point, to 1.71 percent.
Rate Drops
Payroll projections ranged from gains of 100,000 to 238,000 following an initially reported 88,000 increase in March, according to the Bloomberg survey.
Private payrolls, which don’t include jobs at government agencies, increased by 176,000 in April after a revised gain of 154,000 the previous month. Economists forecast they would rise 150,000 following an initially reported 95,000 gain in March.
The jobless rate dropped to the lowest level since December 2008 from 7.6 percent in March. The rate, which is derived from a separate poll of households, was forecast to hold at 7.6 percent, according to the Bloomberg survey median.
