WASHINGTON – Employers boosted payrolls in April by the most in two years and the jobless rate plunged to 6.3 percent as companies grew confident the U.S. economy is emerging from a first-quarter slowdown.
The 288,000 gain in employment was the biggest since January 2012 and followed a revised 203,000 increase the prior month, Labor Department figures showed Friday in Washington. The median forecast in a Bloomberg survey of economists called for a 218,000 advance. Unemployment dropped to the lowest level since September 2008.
Households spent more freely as the first quarter drew to a close and manufacturing accelerated, helping explain why companies such as Ford Motor Co. are taking on more workers. The figures corroborate the Federal Reserve’s view that the expansion is perking up after stagnating last quarter, indicating it will keep trimming stimulus.
“The economy is gathering momentum after the bad winter,” said Michael Gapen, senior U.S. economist at Barclays PLC in New York, whose firm’s projection was among the closest in the Bloomberg survey. “The unemployment rate will stay in its downward trend, which means tapering will continue.”
Stock-index futures held gains and Treasury yields climbed after the figures, with the contract on the Standard & Poor’s 500 Index expiring in June rising 0.1 percent to 1,880.2 at 8:49 a.m. in New York. The yield on the benchmark 10-year Treasury note increased to 2.68 percent from 2.61 percent late Thursday.
Construction companies in April added the most jobs in three months and retailers took on the most workers this year.
One cloud in Friday’s employment report is worker pay is stagnating. Average hourly earnings held at $24.31 in April, and were up 1.9 percent over the past 12 months, the smallest gain this year.
The drop in the unemployment rate from March’s 6.7 percent came as the agency’s survey of households showed the labor force shrank by more the 800,000 in April. The so-called participation rate, which indicates the share of working-age people in the labor force, decreased to 62.8 percent, matching the lowest level since 1978, from 63.2 percent a month earlier.
Forecasts for April payrolls ranged from increases of 155,000 to 292,000, according to the Bloomberg survey of 94 economists. Last year, the U.S. added more than 194,000 jobs each month, compared with about 186,000 in 2012. Economists surveyed by Bloomberg on April 4-9 project payroll gains to match 2013.
Private payrolls, which don’t include government agencies, increased 273,000 in April after a 202,000 gain. Last month, hiring by companies surpassed the pre-recession peak for the first time.