WASHINGTON – The American economy shrugged off the end of a brutal winter last month, rebounding with the biggest hiring surge in two years and suggesting that the job market’s gains could endure.
Employers added 288,000 jobs across industries from manufacturing to construction to accounting. Even local governments hired. The unemployment rate sank to 6.3 percent, its lowest point since 2008, from 6.7 percent.
But the rate fell that far because many fewer people began looking for work in April, thus reducing the number of unemployed. The proportion of Americans who either have a job or are looking for one dropped to a three-decade low.
And the monthly employment report the government released Friday showed that worker pay is stagnant – evidence that the job market has not fully recovered.
Yet April’s robust hiring gains hinted that the economy is returning to the solid pace of growth it achieved in the second half of 2013, before it was hammered by a harsh winter. Job growth has averaged 203,000 a month in the past six months, similar to last year’s 194,000 average.
Analysts said the economy is facing fewer hurdles now. In addition to better weather, growth is no longer held back by steep government spending cuts, which slowed growth in 2013. Many companies had also stockpiled too many goods last fall, forcing them to cut back in the first quarter to clear their shelves.
The absence of these factors is finally allowing the economy’s underlying strength to come to the surface, said Bart Van Ark, chief economist at the Conference Board. The result is not just a relatively strong gain in jobs in April but probably more of the same in May and June.
Explorys, a health care-data provider, has ramped up hiring in the past six months as more hospitals have used its services to limit their costs. The Cleveland-based company has added about 30 people in the past six months, bringing its staff to about 140.
The unemployment rate is now at the lowest level in 5 1/2 years. It’s fallen far enough that economists are anticipating the key next step in an improving job market: higher pay. In the past, when employers have had to draw from a smaller pool of unemployed people, they’ve typically been forced to offer higher pay.
But many economists cite figures in the report that many of the long-term jobless stopped looking for work last month. Their ranks fell 300,000 – the sharpest drop in 2 1/2 years – to 3.5 million. And average hourly wage growth was flat in April, suggesting that unemployment is still too high to force pay up.
Hiring last month was broad-based. Manufacturing gained 12,000, construction 32,000. Professional and technical services added 25,100 jobs.