WASHINGTON (5/11/15)--The labor market produced 223,00 new jobs in April, sending a healthy jolt through the stock market Friday and potentially giving the Federal Reserve the ammunition it needs to raise interest rates as soon as September, according to analysts in reaction to the report from the Bureau of Labor Statistics.
In addition to the hefty payroll expansion, the unemployment rate slipped to a post-recession low of 5.4% from 5.5% during the month (Economy.com May 8).
“I think the April report comes too late to put June on the table, but there is going to be a focus on September,” Carl Tannenbaum, Northern Trust chief economist, told MarketWatch.
Added Chris Williamson, Markit chief economist: “The rebound in economic data flow adds to the likelihood of the Fed opting to begin the process of gradually raising interest rates later this year, with September looking the most likely start date providing the data remain consistent with the moderate recovery story in the coming months.”
Private-sector payrolls gained 213,000 jobs for the month, with the goods-producing industry adding 31,000 jobs and the construction industry producing 45,000 jobs for the month. Government payrolls added 10,000 jobs after losing 9,000 the month prior.
Average hourly earnings for all workers, meanwhile, inched up by 0.1% in April, the average workweek was unchanged at 34.5 hours, and weekly earnings edged up by 0.1%.
Further, the number of workers unemployed for more than six months continued to drop, with fewer employees receiving part-time work involuntarily.
While some analysts believe the growth increases will be temporary, “forward-looking indicators such as temporary hiring improved in April,” said Sophia Koropeckyj, Moody’s analyst (Economy.com). “In addition, the strong gains in construction reflect stronger building activity.”